Correlation Between Symphony Environmental and Hon Hai
Can any of the company-specific risk be diversified away by investing in both Symphony Environmental and Hon Hai 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 Symphony Environmental and Hon Hai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Symphony Environmental Technologies and Hon Hai Precision, you can compare the effects of market volatilities on Symphony Environmental and Hon Hai 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 Symphony Environmental with a short position of Hon Hai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Symphony Environmental and Hon Hai.
Diversification Opportunities for Symphony Environmental and Hon Hai
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Symphony and Hon is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Symphony Environmental Technol and Hon Hai Precision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hon Hai Precision and Symphony Environmental 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 Symphony Environmental Technologies are associated (or correlated) with Hon Hai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hon Hai Precision has no effect on the direction of Symphony Environmental i.e., Symphony Environmental and Hon Hai go up and down completely randomly.
Pair Corralation between Symphony Environmental and Hon Hai
Assuming the 90 days trading horizon Symphony Environmental Technologies is expected to under-perform the Hon Hai. In addition to that, Symphony Environmental is 2.5 times more volatile than Hon Hai Precision. It trades about -0.02 of its total potential returns per unit of risk. Hon Hai Precision is currently generating about 0.07 per unit of volatility. If you would invest 584.00 in Hon Hai Precision on September 12, 2024 and sell it today you would earn a total of 572.00 from holding Hon Hai Precision or generate 97.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Symphony Environmental Technol vs. Hon Hai Precision
Performance |
| Timeline |
| Symphony Environmental |
| Hon Hai Precision |
Symphony Environmental and Hon Hai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Symphony Environmental and Hon Hai
The main advantage of trading using opposite Symphony Environmental and Hon Hai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Symphony Environmental position performs unexpectedly, Hon Hai 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 Hon Hai will offset losses from the drop in Hon Hai's long position.| Symphony Environmental vs. Givaudan SA | Symphony Environmental vs. Antofagasta PLC | Symphony Environmental vs. Ferrexpo PLC | Symphony Environmental vs. Atalaya Mining |
| Hon Hai vs. LPKF Laser Electronics | Hon Hai vs. Symphony Environmental Technologies | Hon Hai vs. Dentsply Sirona | Hon Hai vs. Foresight Environmental Infrastructure |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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