Correlation Between FSP Technology and HannStar Board

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

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

Diversification Opportunities for FSP Technology and HannStar Board

-0.35

Correlation Coefficient

FSP Technology  HannStar Board

Very good diversification

The 3 months correlation between FSP and HannStar is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding FSP Technology and HannStar Board Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HannStar Board Corp and FSP 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 FSP Technology are associated (or correlated) with HannStar Board. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HannStar Board Corp has no effect on the direction of FSP Technology i.e., FSP Technology and HannStar Board go up and down completely randomly.

Pair Corralation between FSP Technology and HannStar Board

Assuming the 90 days trading horizon FSP Technology is expected to generate 2.11 times more return on investment than HannStar Board. However, FSP Technology is 2.11 times more volatile than HannStar Board Corp. It trades about 0.05 of its potential returns per unit of risk. HannStar Board Corp is currently generating about -0.07 per unit of risk. If you would invest  6,090  in FSP Technology on October 22, 2024 and sell it today you would earn a total of  370.00  from holding FSP Technology or generate 6.08% return on investment over 90 days.

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

FSP Technology  vs.  HannStar Board Corp

FSP Technology

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FSP Technology are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, FSP Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.

HannStar Board Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HannStar Board Corp 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.

Pair Trading with FSP Technology and HannStar Board

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

The idea behind FSP Technology and HannStar Board Corp 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.