Correlation Between Hon Hai and Kopin
Can any of the company-specific risk be diversified away by investing in both Hon Hai and Kopin 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 Kopin 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 Kopin, you can compare the effects of market volatilities on Hon Hai and Kopin 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 Kopin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hon Hai and Kopin.
Diversification Opportunities for Hon Hai and Kopin
Pay attention - limited upside
The 3 months correlation between Hon and Kopin is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Hon Hai Precision and Kopin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kopin 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 Kopin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kopin has no effect on the direction of Hon Hai i.e., Hon Hai and Kopin go up and down completely randomly.
Pair Corralation between Hon Hai and Kopin
Assuming the 90 days horizon Hon Hai is expected to generate 1.74 times less return on investment than Kopin. But when comparing it to its historical volatility, Hon Hai Precision is 2.66 times less risky than Kopin. It trades about 0.06 of its potential returns per unit of risk. Kopin is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 125.00 in Kopin on November 5, 2024 and sell it today you would earn a total of 49.00 from holding Kopin or generate 39.2% 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. Kopin
Performance |
| Timeline |
| Hon Hai Precision |
| Kopin |
Hon Hai and Kopin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hon Hai and Kopin
The main advantage of trading using opposite Hon Hai and Kopin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hon Hai position performs unexpectedly, Kopin 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 Kopin will offset losses from the drop in Kopin'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 |
| Kopin vs. Universal Display | Kopin vs. Daktronics | Kopin vs. KULR Technology Group | Kopin vs. LightPath 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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