Correlation Between Hon Hai and Whiting Petroleum
Can any of the company-specific risk be diversified away by investing in both Hon Hai and Whiting Petroleum 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 Whiting Petroleum 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 Whiting Petroleum, you can compare the effects of market volatilities on Hon Hai and Whiting Petroleum 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 Whiting Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hon Hai and Whiting Petroleum.
Diversification Opportunities for Hon Hai and Whiting Petroleum
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hon and Whiting is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Hon Hai Precision and Whiting Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whiting Petroleum 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 Whiting Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whiting Petroleum has no effect on the direction of Hon Hai i.e., Hon Hai and Whiting Petroleum go up and down completely randomly.
Pair Corralation between Hon Hai and Whiting Petroleum
Assuming the 90 days horizon Hon Hai Precision is expected to generate 0.12 times more return on investment than Whiting Petroleum. However, Hon Hai Precision is 8.67 times less risky than Whiting Petroleum. It trades about 0.13 of its potential returns per unit of risk. Whiting Petroleum is currently generating about -0.04 per unit of risk. If you would invest 1,026 in Hon Hai Precision on November 28, 2024 and sell it today you would earn a total of 54.00 from holding Hon Hai Precision or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hon Hai Precision vs. Whiting Petroleum
Performance |
| Timeline |
| Hon Hai Precision |
| Whiting Petroleum |
Hon Hai and Whiting Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hon Hai and Whiting Petroleum
The main advantage of trading using opposite Hon Hai and Whiting Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hon Hai position performs unexpectedly, Whiting Petroleum 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 Whiting Petroleum will offset losses from the drop in Whiting Petroleum'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 |
| Whiting Petroleum vs. Chord Energy Corp | Whiting Petroleum vs. Bristow Group | Whiting Petroleum vs. Pioneer Bancorp |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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