Correlation Between HannStar Board and LIWANLI Innovation

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

Diversification Opportunities for HannStar Board and LIWANLI Innovation

-0.28

Correlation Coefficient

HannStar Board  LIWANLI Innovation

Very good diversification

The 3 months correlation between HannStar and LIWANLI is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding HannStar Board Corp and LIWANLI Innovation Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIWANLI Innovation 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 LIWANLI Innovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIWANLI Innovation has no effect on the direction of HannStar Board i.e., HannStar Board and LIWANLI Innovation go up and down completely randomly.

Pair Corralation between HannStar Board and LIWANLI Innovation

Assuming the 90 days trading horizon HannStar Board Corp is expected to generate 0.7 times more return on investment than LIWANLI Innovation. However, HannStar Board Corp is 1.44 times less risky than LIWANLI Innovation. It trades about 0.16 of its potential returns per unit of risk. LIWANLI Innovation Co is currently generating about -0.08 per unit of risk. If you would invest  5,010  in HannStar Board Corp on December 23, 2024 and sell it today you would earn a total of  680.00  from holding HannStar Board Corp or generate 13.57% return on investment over 90 days.

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

HannStar Board Corp  vs.  LIWANLI Innovation Co

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.

LIWANLI Innovation

Risk-Adjusted Performance

Very Weak

Over the last 90 days LIWANLI Innovation Co 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 HannStar Board and LIWANLI Innovation

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

The idea behind HannStar Board Corp and LIWANLI Innovation 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.