Correlation Between Hon Hai and Jumbo SA
Can any of the company-specific risk be diversified away by investing in both Hon Hai and Jumbo SA 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 Jumbo SA 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 Jumbo SA ADR, you can compare the effects of market volatilities on Hon Hai and Jumbo SA 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 Jumbo SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hon Hai and Jumbo SA.
Diversification Opportunities for Hon Hai and Jumbo SA
Pay attention - limited upside
The 3 months correlation between Hon and Jumbo is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Hon Hai Precision and Jumbo SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jumbo SA ADR 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 Jumbo SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jumbo SA ADR has no effect on the direction of Hon Hai i.e., Hon Hai and Jumbo SA go up and down completely randomly.
Pair Corralation between Hon Hai and Jumbo SA
Assuming the 90 days horizon Hon Hai Precision is expected to generate 0.72 times more return on investment than Jumbo SA. However, Hon Hai Precision is 1.4 times less risky than Jumbo SA. It trades about -0.01 of its potential returns per unit of risk. Jumbo SA ADR is currently generating about -0.02 per unit of risk. If you would invest 1,174 in Hon Hai Precision on October 26, 2024 and sell it today you would lose (76.00) from holding Hon Hai Precision or give up 6.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 96.85% |
| Values | Daily Returns |
Hon Hai Precision vs. Jumbo SA ADR
Performance |
| Timeline |
| Hon Hai Precision |
| Jumbo SA ADR |
Hon Hai and Jumbo SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hon Hai and Jumbo SA
The main advantage of trading using opposite Hon Hai and Jumbo SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hon Hai position performs unexpectedly, Jumbo SA 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 Jumbo SA will offset losses from the drop in Jumbo SA'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 |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |