Correlation Between Hannstar Display and Hsinjing Holding

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

Diversification Opportunities for Hannstar Display and Hsinjing Holding

-0.19

Correlation Coefficient

Hannstar Display  Hsinjing Holding

Good diversification

The 3 months correlation between Hannstar and Hsinjing is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Hannstar Display Corp and Hsinjing Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hsinjing Holding 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 Hsinjing Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hsinjing Holding has no effect on the direction of Hannstar Display i.e., Hannstar Display and Hsinjing Holding go up and down completely randomly.

Pair Corralation between Hannstar Display and Hsinjing Holding

Assuming the 90 days trading horizon Hannstar Display Corp is expected to generate 1.28 times more return on investment than Hsinjing Holding. However, Hannstar Display is 1.28 times more volatile than Hsinjing Holding Co. It trades about -0.01 of its potential returns per unit of risk. Hsinjing Holding Co is currently generating about -0.02 per unit of risk. If you would invest  838.00  in Hannstar Display Corp on December 27, 2024 and sell it today you would lose (11.00) from holding Hannstar Display Corp or give up 1.31% of portfolio value over 90 days.

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

Hannstar Display Corp  vs.  Hsinjing Holding Co

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.

Hsinjing Holding

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Hannstar Display and Hsinjing Holding

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

The idea behind Hannstar Display Corp and Hsinjing Holding 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.