Correlation Between CSG Holding and Hoshine Silicon

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

By analyzing existing cross correlation between CSG Holding Co and Hoshine Silicon Ind, you can compare the effects of market volatilities on CSG Holding and Hoshine Silicon 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 CSG Holding with a short position of Hoshine Silicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSG Holding and Hoshine Silicon.

Diversification Opportunities for CSG Holding and Hoshine Silicon

0.45

Correlation Coefficient

CSG Holding  Hoshine Silicon

Very weak diversification

The 3 months correlation between CSG and Hoshine is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding CSG Holding Co and Hoshine Silicon Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoshine Silicon Ind and CSG Holding 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 CSG Holding Co are associated (or correlated) with Hoshine Silicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoshine Silicon Ind has no effect on the direction of CSG Holding i.e., CSG Holding and Hoshine Silicon go up and down completely randomly.

Pair Corralation between CSG Holding and Hoshine Silicon

Assuming the 90 days trading horizon CSG Holding Co is expected to under-perform the Hoshine Silicon. In addition to that, CSG Holding is 1.24 times more volatile than Hoshine Silicon Ind. It trades about -0.13 of its total potential returns per unit of risk. Hoshine Silicon Ind is currently generating about -0.11 per unit of volatility. If you would invest  5,969  in Hoshine Silicon Ind on December 3, 2024 and sell it today you would lose (576.00) from holding Hoshine Silicon Ind or give up 9.65% of portfolio value over 90 days.

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

CSG Holding Co  vs.  Hoshine Silicon Ind

CSG Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days CSG Holding Co 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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Hoshine Silicon Ind

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hoshine Silicon Ind has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with CSG Holding and Hoshine Silicon

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

The idea behind CSG Holding Co and Hoshine Silicon Ind 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.