Correlation Between Hiwin Mikrosystem and P Duke

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

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

Diversification Opportunities for Hiwin Mikrosystem and P Duke

0.62

Correlation Coefficient

Hiwin Mikrosystem  P Duke

Poor diversification

The 3 months correlation between Hiwin and 8109 is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Hiwin Mikrosystem Corp and P Duke Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on P Duke Technology and Hiwin Mikrosystem 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 Hiwin Mikrosystem Corp are associated (or correlated) with P Duke. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of P Duke Technology has no effect on the direction of Hiwin Mikrosystem i.e., Hiwin Mikrosystem and P Duke go up and down completely randomly.

Pair Corralation between Hiwin Mikrosystem and P Duke

Assuming the 90 days trading horizon Hiwin Mikrosystem Corp is expected to under-perform the P Duke. In addition to that, Hiwin Mikrosystem is 2.85 times more volatile than P Duke Technology Co. It trades about -0.08 of its total potential returns per unit of risk. P Duke Technology Co is currently generating about -0.03 per unit of volatility. If you would invest  9,020  in P Duke Technology Co on December 29, 2024 and sell it today you would lose (210.00) from holding P Duke Technology Co or give up 2.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.25%
Values	Daily Returns

Hiwin Mikrosystem Corp  vs.  P Duke Technology Co

Hiwin Mikrosystem Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hiwin Mikrosystem Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

P Duke Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days P Duke Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, P Duke is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Hiwin Mikrosystem and P Duke

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

The idea behind Hiwin Mikrosystem Corp and P Duke Technology 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.