Correlation Between International Business and Hi Sun
Can any of the company-specific risk be diversified away by investing in both International Business and Hi Sun 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 International Business and Hi Sun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Business Machines and Hi Sun Technology, you can compare the effects of market volatilities on International Business and Hi Sun 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 International Business with a short position of Hi Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and Hi Sun.
Diversification Opportunities for International Business and Hi Sun
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and HISNF is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and Hi Sun Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hi Sun Technology and International Business 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 International Business Machines are associated (or correlated) with Hi Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hi Sun Technology has no effect on the direction of International Business i.e., International Business and Hi Sun go up and down completely randomly.
Pair Corralation between International Business and Hi Sun
Considering the 90-day investment horizon International Business is expected to generate 2.43 times less return on investment than Hi Sun. But when comparing it to its historical volatility, International Business Machines is 8.27 times less risky than Hi Sun. It trades about 0.09 of its potential returns per unit of risk. Hi Sun Technology is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5.00 in Hi Sun Technology on September 3, 2024 and sell it today you would lose (1.80) from holding Hi Sun Technology or give up 36.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Business Machine vs. Hi Sun Technology
Performance |
| Timeline |
| International Business |
| Hi Sun Technology |
International Business and Hi Sun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Business and Hi Sun
The main advantage of trading using opposite International Business and Hi Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business position performs unexpectedly, Hi Sun 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 Hi Sun will offset losses from the drop in Hi Sun's long position.| International Business vs. Partner Communications | International Business vs. Merck Company | International Business vs. Western Midstream Partners | International Business vs. Edgewise Therapeutics |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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