Correlation Between Hon Hai and Vicor
Can any of the company-specific risk be diversified away by investing in both Hon Hai and Vicor 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 Vicor 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 Vicor, you can compare the effects of market volatilities on Hon Hai and Vicor 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 Vicor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hon Hai and Vicor.
Diversification Opportunities for Hon Hai and Vicor
Significant diversification
The 3 months correlation between Hon and Vicor is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Hon Hai Precision and Vicor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vicor 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 Vicor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vicor has no effect on the direction of Hon Hai i.e., Hon Hai and Vicor go up and down completely randomly.
Pair Corralation between Hon Hai and Vicor
Assuming the 90 days horizon Hon Hai Precision is expected to under-perform the Vicor. But the pink sheet apears to be less risky and, when comparing its historical volatility, Hon Hai Precision is 1.86 times less risky than Vicor. The pink sheet trades about -0.16 of its potential returns per unit of risk. The Vicor is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 5,666 in Vicor on October 26, 2024 and sell it today you would earn a total of 40.00 from holding Vicor or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.5% |
| Values | Daily Returns |
Hon Hai Precision vs. Vicor
Performance |
| Timeline |
| Hon Hai Precision |
| Vicor |
Hon Hai and Vicor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hon Hai and Vicor
The main advantage of trading using opposite Hon Hai and Vicor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hon Hai position performs unexpectedly, Vicor 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 Vicor will offset losses from the drop in Vicor'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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |