Correlation Between HannStar Board and Shuttle

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

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

Diversification Opportunities for HannStar Board and Shuttle

0.75

Correlation Coefficient

HannStar Board  Shuttle

Poor diversification

The 3 months correlation between HannStar and Shuttle is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding HannStar Board Corp and Shuttle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shuttle and HannStar Board 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 HannStar Board Corp are associated (or correlated) with Shuttle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shuttle has no effect on the direction of HannStar Board i.e., HannStar Board and Shuttle go up and down completely randomly.

Pair Corralation between HannStar Board and Shuttle

Assuming the 90 days trading horizon HannStar Board Corp is expected to generate 0.76 times more return on investment than Shuttle. However, HannStar Board Corp is 1.32 times less risky than Shuttle. It trades about 0.16 of its potential returns per unit of risk. Shuttle is currently generating about 0.04 per unit of risk. If you would invest  5,020  in HannStar Board Corp on December 24, 2024 and sell it today you would earn a total of  670.00  from holding HannStar Board Corp or generate 13.35% return on investment over 90 days.

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

HannStar Board Corp  vs.  Shuttle

HannStar Board Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in HannStar Board Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, HannStar Board showed solid returns over the last few months and may actually be approaching a breakup point.

Shuttle

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Shuttle are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Shuttle 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 HannStar Board and Shuttle

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

The idea behind HannStar Board Corp and Shuttle 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.