Correlation Between Himax Technologies and Smart Global
Can any of the company-specific risk be diversified away by investing in both Himax Technologies and Smart Global at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Himax Technologies and Smart Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Himax Technologies and Smart Global Holdings, you can compare the effects of market volatilities on Himax Technologies and Smart Global and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Himax Technologies with a short position of Smart Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Himax Technologies and Smart Global.
Diversification Opportunities for Himax Technologies and Smart Global
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Himax and Smart is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Himax Technologies and Smart Global Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smart Global Holdings and Himax Technologies is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Himax Technologies are associated (or correlated) with Smart Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smart Global Holdings has no effect on the direction of Himax Technologies i.e., Himax Technologies and Smart Global go up and down completely randomly.
Pair Corralation between Himax Technologies and Smart Global
If you would invest 2,041 in Smart Global Holdings on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Smart Global Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Himax Technologies vs. Smart Global Holdings
Performance |
| Timeline |
| Himax Technologies |
| Smart Global Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Himax Technologies and Smart Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Himax Technologies and Smart Global
The main advantage of trading using opposite Himax Technologies and Smart Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Himax Technologies position performs unexpectedly, Smart Global can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Smart Global will offset losses from the drop in Smart Global's long position.| Himax Technologies vs. ASE Industrial Holding | Himax Technologies vs. United Microelectronics | Himax Technologies vs. MaxLinear | Himax Technologies vs. SemiLEDS |
| Smart Global vs. Silicon Motion Technology | Smart Global vs. MACOM Technology Solutions | Smart Global vs. Semtech | Smart Global vs. Alpha and Omega |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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