Correlation Between HannStar Board and Transcend Information

Can any of the company-specific risk be diversified away by investing in both HannStar Board and Transcend Information 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 Transcend Information 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 Transcend Information, you can compare the effects of market volatilities on HannStar Board and Transcend Information 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 Transcend Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of HannStar Board and Transcend Information.

Diversification Opportunities for HannStar Board and Transcend Information

0.23

Correlation Coefficient

HannStar Board  Transcend Information

Modest diversification

The 3 months correlation between HannStar and Transcend is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding HannStar Board Corp and Transcend Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transcend Information 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 Transcend Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transcend Information has no effect on the direction of HannStar Board i.e., HannStar Board and Transcend Information go up and down completely randomly.

Pair Corralation between HannStar Board and Transcend Information

Assuming the 90 days trading horizon HannStar Board is expected to generate 1.29 times less return on investment than Transcend Information. But when comparing it to its historical volatility, HannStar Board Corp is 1.25 times less risky than Transcend Information. It trades about 0.15 of its potential returns per unit of risk. Transcend Information is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  8,770  in Transcend Information on December 25, 2024 and sell it today you would earn a total of  1,430  from holding Transcend Information or generate 16.31% return on investment over 90 days.

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

HannStar Board Corp  vs.  Transcend Information

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 11 (%) 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.

Transcend Information

Risk-Adjusted Performance

Good

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

Pair Trading with HannStar Board and Transcend Information

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

The idea behind HannStar Board Corp and Transcend Information 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.