Correlation Between Hon Hai and Marksmen Energy
Can any of the company-specific risk be diversified away by investing in both Hon Hai and Marksmen Energy 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 Marksmen Energy 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 Marksmen Energy, you can compare the effects of market volatilities on Hon Hai and Marksmen Energy 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 Marksmen Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hon Hai and Marksmen Energy.
Diversification Opportunities for Hon Hai and Marksmen Energy
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hon and Marksmen is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hon Hai Precision and Marksmen Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marksmen Energy 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 Marksmen Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marksmen Energy has no effect on the direction of Hon Hai i.e., Hon Hai and Marksmen Energy go up and down completely randomly.
Pair Corralation between Hon Hai and Marksmen Energy
Assuming the 90 days horizon Hon Hai Precision is expected to under-perform the Marksmen Energy. But the pink sheet apears to be less risky and, when comparing its historical volatility, Hon Hai Precision is 20.22 times less risky than Marksmen Energy. The pink sheet trades about -0.13 of its potential returns per unit of risk. The Marksmen Energy is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 0.36 in Marksmen Energy on September 1, 2024 and sell it today you would lose (0.02) from holding Marksmen Energy or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Hon Hai Precision vs. Marksmen Energy
Performance |
| Timeline |
| Hon Hai Precision |
| Marksmen Energy |
Hon Hai and Marksmen Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hon Hai and Marksmen Energy
The main advantage of trading using opposite Hon Hai and Marksmen Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hon Hai position performs unexpectedly, Marksmen Energy 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 Marksmen Energy will offset losses from the drop in Marksmen Energy'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 |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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