Correlation Between HanS Laser and Anker Innovations

Can any of the company-specific risk be diversified away by investing in both HanS Laser and Anker Innovations 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 HanS Laser and Anker Innovations into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HanS Laser Tech and Anker Innovations Technology, you can compare the effects of market volatilities on HanS Laser and Anker Innovations 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 HanS Laser with a short position of Anker Innovations. Check out your portfolio center. Please also check ongoing floating volatility patterns of HanS Laser and Anker Innovations.

Diversification Opportunities for HanS Laser and Anker Innovations

0.41

Correlation Coefficient

HanS Laser  Anker Innovations

Very weak diversification

The 3 months correlation between HanS and Anker is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding HanS Laser Tech and Anker Innovations Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anker Innovations and HanS Laser 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 HanS Laser Tech are associated (or correlated) with Anker Innovations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anker Innovations has no effect on the direction of HanS Laser i.e., HanS Laser and Anker Innovations go up and down completely randomly.

Pair Corralation between HanS Laser and Anker Innovations

Assuming the 90 days trading horizon HanS Laser Tech is expected to under-perform the Anker Innovations. But the stock apears to be less risky and, when comparing its historical volatility, HanS Laser Tech is 1.11 times less risky than Anker Innovations. The stock trades about -0.34 of its potential returns per unit of risk. The Anker Innovations Technology is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  8,686  in Anker Innovations Technology on October 9, 2024 and sell it today you would earn a total of  759.00  from holding Anker Innovations Technology or generate 8.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

HanS Laser Tech  vs.  Anker Innovations Technology

HanS Laser Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HanS Laser Tech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, HanS Laser is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Anker Innovations

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Anker Innovations Technology are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Anker Innovations may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with HanS Laser and Anker Innovations

The main advantage of trading using opposite HanS Laser and Anker Innovations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HanS Laser position performs unexpectedly, Anker Innovations 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 Anker Innovations will offset losses from the drop in Anker Innovations' long position.

The idea behind HanS Laser Tech and Anker Innovations Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.