Correlation Between Hon Hai and Bank of San
Can any of the company-specific risk be diversified away by investing in both Hon Hai and Bank of San 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 Hon Hai and Bank of San into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hon Hai Precision and Bank of San, you can compare the effects of market volatilities on Hon Hai and Bank of San 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 Hon Hai with a short position of Bank of San. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hon Hai and Bank of San.
Diversification Opportunities for Hon Hai and Bank of San
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hon and Bank is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Hon Hai Precision and Bank of San in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of San and Hon Hai 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 Hon Hai Precision are associated (or correlated) with Bank of San. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of San has no effect on the direction of Hon Hai i.e., Hon Hai and Bank of San go up and down completely randomly.
Pair Corralation between Hon Hai and Bank of San
Assuming the 90 days horizon Hon Hai Precision is expected to generate 1.47 times more return on investment than Bank of San. However, Hon Hai is 1.47 times more volatile than Bank of San. It trades about 0.06 of its potential returns per unit of risk. Bank of San is currently generating about 0.02 per unit of risk. If you would invest 627.00 in Hon Hai Precision on November 5, 2024 and sell it today you would earn a total of 433.00 from holding Hon Hai Precision or generate 69.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hon Hai Precision vs. Bank of San
Performance |
| Timeline |
| Hon Hai Precision |
| Bank of San |
Hon Hai and Bank of San Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hon Hai and Bank of San
The main advantage of trading using opposite Hon Hai and Bank of San positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hon Hai position performs unexpectedly, Bank of San 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 Bank of San will offset losses from the drop in Bank of San's long position.| Hon Hai vs. AT S Austria | Hon Hai vs. alpha En | Hon Hai vs. Alps Electric Co | Hon Hai vs. Bitmine Immersion Technologies |
| Bank of San vs. Pioneer Bankcorp | Bank of San vs. Liberty Northwest Bancorp | Bank of San vs. Summit Bancshares | Bank of San vs. National Capital Bank |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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