Correlation Between ICC International and Hwa Fong
Can any of the company-specific risk be diversified away by investing in both ICC International and Hwa Fong 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 ICC International and Hwa Fong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICC International Public and Hwa Fong Rubber, you can compare the effects of market volatilities on ICC International and Hwa Fong 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 ICC International with a short position of Hwa Fong. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICC International and Hwa Fong.
Diversification Opportunities for ICC International and Hwa Fong
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ICC and Hwa is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding ICC International Public and Hwa Fong Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwa Fong Rubber and ICC International 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 ICC International Public are associated (or correlated) with Hwa Fong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwa Fong Rubber has no effect on the direction of ICC International i.e., ICC International and Hwa Fong go up and down completely randomly.
Pair Corralation between ICC International and Hwa Fong
Assuming the 90 days trading horizon ICC International Public is expected to under-perform the Hwa Fong. In addition to that, ICC International is 2.27 times more volatile than Hwa Fong Rubber. It trades about -0.1 of its total potential returns per unit of risk. Hwa Fong Rubber is currently generating about -0.15 per unit of volatility. If you would invest 428.00 in Hwa Fong Rubber on September 12, 2024 and sell it today you would lose (14.00) from holding Hwa Fong Rubber or give up 3.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICC International Public vs. Hwa Fong Rubber
Performance |
| Timeline |
| ICC International Public |
| Hwa Fong Rubber |
ICC International and Hwa Fong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICC International and Hwa Fong
The main advantage of trading using opposite ICC International and Hwa Fong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICC International position performs unexpectedly, Hwa Fong 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 Hwa Fong will offset losses from the drop in Hwa Fong's long position.| ICC International vs. Hwa Fong Rubber | ICC International vs. AAPICO Hitech Public | ICC International vs. Haad Thip Public | ICC International vs. Italian Thai Development Public |
| Hwa Fong vs. Haad Thip Public | Hwa Fong vs. AAPICO Hitech Public | Hwa Fong vs. Inoue Rubber Public | Hwa Fong vs. Hana Microelectronics Public |
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 Stocks Directory module to find actively traded stocks across global markets.
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