Correlation Between Hannstar Display and Genius Electronic

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

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

Diversification Opportunities for Hannstar Display and Genius Electronic

-0.1

Correlation Coefficient

Hannstar Display  Genius Electronic

Good diversification

The 3 months correlation between Hannstar and Genius is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Hannstar Display Corp and Genius Electronic Optical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genius Electronic Optical and Hannstar Display 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 Display Corp are associated (or correlated) with Genius Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genius Electronic Optical has no effect on the direction of Hannstar Display i.e., Hannstar Display and Genius Electronic go up and down completely randomly.

Pair Corralation between Hannstar Display and Genius Electronic

Assuming the 90 days trading horizon Hannstar Display Corp is expected to under-perform the Genius Electronic. But the stock apears to be less risky and, when comparing its historical volatility, Hannstar Display Corp is 1.17 times less risky than Genius Electronic. The stock trades about -0.01 of its potential returns per unit of risk. The Genius Electronic Optical is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  44,650  in Genius Electronic Optical on December 2, 2024 and sell it today you would earn a total of  3,050  from holding Genius Electronic Optical or generate 6.83% return on investment over 90 days.

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

Hannstar Display Corp  vs.  Genius Electronic Optical

Hannstar Display Corp

Risk-Adjusted Performance

Very Weak

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

Genius Electronic Optical

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Genius Electronic Optical are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Genius Electronic may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Hannstar Display and Genius Electronic

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

The idea behind Hannstar Display Corp and Genius Electronic Optical 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.