Correlation Between SiS Distribution and Hana Microelectronics
Can any of the company-specific risk be diversified away by investing in both SiS Distribution and Hana Microelectronics 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 SiS Distribution and Hana Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SiS Distribution Public and Hana Microelectronics Public, you can compare the effects of market volatilities on SiS Distribution and Hana Microelectronics 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 SiS Distribution with a short position of Hana Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SiS Distribution and Hana Microelectronics.
Diversification Opportunities for SiS Distribution and Hana Microelectronics
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between SiS and Hana is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding SiS Distribution Public and Hana Microelectronics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Microelectronics and SiS Distribution 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 SiS Distribution Public are associated (or correlated) with Hana Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hana Microelectronics has no effect on the direction of SiS Distribution i.e., SiS Distribution and Hana Microelectronics go up and down completely randomly.
Pair Corralation between SiS Distribution and Hana Microelectronics
Assuming the 90 days trading horizon SiS Distribution Public is expected to generate 1.15 times more return on investment than Hana Microelectronics. However, SiS Distribution is 1.15 times more volatile than Hana Microelectronics Public. It trades about 0.11 of its potential returns per unit of risk. Hana Microelectronics Public is currently generating about -0.38 per unit of risk. If you would invest 2,575 in SiS Distribution Public on August 25, 2024 and sell it today you would earn a total of 225.00 from holding SiS Distribution Public or generate 8.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SiS Distribution Public vs. Hana Microelectronics Public
Performance |
| Timeline |
| SiS Distribution Public |
| Hana Microelectronics |
SiS Distribution and Hana Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SiS Distribution and Hana Microelectronics
The main advantage of trading using opposite SiS Distribution and Hana Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SiS Distribution position performs unexpectedly, Hana Microelectronics 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 Hana Microelectronics will offset losses from the drop in Hana Microelectronics' long position.| SiS Distribution vs. Synnex Public | SiS Distribution vs. Hana Microelectronics Public | SiS Distribution vs. Singer Thailand Public | SiS Distribution vs. Jay Mart Public |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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