Correlation Between Hon Hai and United States
Can any of the company-specific risk be diversified away by investing in both Hon Hai and United States 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 United States 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 United States Basketball, you can compare the effects of market volatilities on Hon Hai and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hon Hai and United States.
Diversification Opportunities for Hon Hai and United States
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hon and United is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Hon Hai Precision and United States Basketball in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Basketball 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Basketball has no effect on the direction of Hon Hai i.e., Hon Hai and United States go up and down completely randomly.
Pair Corralation between Hon Hai and United States
Assuming the 90 days horizon Hon Hai is expected to generate 18.67 times less return on investment than United States. But when comparing it to its historical volatility, Hon Hai Precision is 16.45 times less risky than United States. It trades about 0.08 of its potential returns per unit of risk. United States Basketball is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 38.00 in United States Basketball on September 4, 2024 and sell it today you would lose (11.00) from holding United States Basketball or give up 28.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 30.51% |
| Values | Daily Returns |
Hon Hai Precision vs. United States Basketball
Performance |
| Timeline |
| Hon Hai Precision |
| United States Basketball |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hon Hai and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hon Hai and United States
The main advantage of trading using opposite Hon Hai and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hon Hai position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| Hon Hai vs. KULR Technology Group | Hon Hai vs. Ouster Inc | Hon Hai vs. MicroCloud Hologram | Hon Hai vs. Kopin |
| United States vs. A1 Group | United States vs. Roth CH Acquisition | United States vs. Awaysis Capital | United States vs. Starguide Group |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |