Correlation Between Stark Technology and Hanpin Electron

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

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

Diversification Opportunities for Stark Technology and Hanpin Electron

0.17

Correlation Coefficient

Stark Technology  Hanpin Electron

Average diversification

The 3 months correlation between Stark and Hanpin is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Stark Technology and Hanpin Electron Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanpin Electron and Stark Technology 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 Stark Technology 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 Stark Technology i.e., Stark Technology and Hanpin Electron go up and down completely randomly.

Pair Corralation between Stark Technology and Hanpin Electron

Assuming the 90 days trading horizon Stark Technology is expected to generate 0.96 times more return on investment than Hanpin Electron. However, Stark Technology is 1.04 times less risky than Hanpin Electron. It trades about 0.12 of its potential returns per unit of risk. Hanpin Electron Co is currently generating about -0.17 per unit of risk. If you would invest  13,750  in Stark Technology on October 11, 2024 and sell it today you would earn a total of  500.00  from holding Stark Technology or generate 3.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Stark Technology  vs.  Hanpin Electron Co

Stark Technology

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Stark Technology are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Stark Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Hanpin Electron

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hanpin Electron Co are ranked lower than 9 (%) 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 Stark Technology and Hanpin Electron

The main advantage of trading using opposite Stark Technology and Hanpin Electron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stark Technology 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 Stark Technology 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.

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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.