Correlation Between Ichia Technologies and Hanpin Electron

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

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

Diversification Opportunities for Ichia Technologies and Hanpin Electron

-0.24

Correlation Coefficient

Ichia Technologies  Hanpin Electron

Very good diversification

The 3 months correlation between Ichia and Hanpin is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ichia Technologies and Hanpin Electron Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanpin Electron and Ichia Technologies 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 Ichia Technologies are associated (or correlated) with Hanpin Electron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanpin Electron has no effect on the direction of Ichia Technologies i.e., Ichia Technologies and Hanpin Electron go up and down completely randomly.

Pair Corralation between Ichia Technologies and Hanpin Electron

Assuming the 90 days trading horizon Ichia Technologies is expected to under-perform the Hanpin Electron. But the stock apears to be less risky and, when comparing its historical volatility, Ichia Technologies is 1.13 times less risky than Hanpin Electron. The stock trades about -0.16 of its potential returns per unit of risk. The Hanpin Electron Co is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  5,770  in Hanpin Electron Co on October 26, 2024 and sell it today you would lose (130.00) from holding Hanpin Electron Co or give up 2.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Ichia Technologies  vs.  Hanpin Electron Co

Ichia Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ichia Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Hanpin Electron

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hanpin Electron Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Hanpin Electron showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ichia Technologies and Hanpin Electron

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

The idea behind Ichia Technologies and Hanpin Electron Co 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.