Correlation Between HANA Micron and Com2uS

Can any of the company-specific risk be diversified away by investing in both HANA Micron and Com2uS 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 HANA Micron and Com2uS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HANA Micron and Com2uS, you can compare the effects of market volatilities on HANA Micron and Com2uS 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 HANA Micron with a short position of Com2uS. Check out your portfolio center. Please also check ongoing floating volatility patterns of HANA Micron and Com2uS.

Diversification Opportunities for HANA Micron and Com2uS

-0.58

Correlation Coefficient

HANA Micron  Com2uS

Excellent diversification

The 3 months correlation between HANA and Com2uS is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding HANA Micron and Com2uS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Com2uS and HANA Micron 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 HANA Micron are associated (or correlated) with Com2uS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Com2uS has no effect on the direction of HANA Micron i.e., HANA Micron and Com2uS go up and down completely randomly.

Pair Corralation between HANA Micron and Com2uS

Assuming the 90 days trading horizon HANA Micron is expected to under-perform the Com2uS. But the stock apears to be less risky and, when comparing its historical volatility, HANA Micron is 1.02 times less risky than Com2uS. The stock trades about -0.14 of its potential returns per unit of risk. The Com2uS is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  3,610,000  in Com2uS on September 12, 2024 and sell it today you would earn a total of  1,145,000  from holding Com2uS or generate 31.72% return on investment over 90 days.

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

HANA Micron  vs.  Com2uS

HANA Micron

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HANA Micron has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Com2uS

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Com2uS are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Com2uS sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HANA Micron and Com2uS

The main advantage of trading using opposite HANA Micron and Com2uS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANA Micron position performs unexpectedly, Com2uS 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 Com2uS will offset losses from the drop in Com2uS's long position.

The idea behind HANA Micron and Com2uS 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.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..