Correlation Between Hsin Ba and De Licacy

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

By analyzing existing cross correlation between Hsin Ba Ba and De Licacy Industrial, you can compare the effects of market volatilities on Hsin Ba and De Licacy 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 Hsin Ba with a short position of De Licacy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hsin Ba and De Licacy.

Diversification Opportunities for Hsin Ba and De Licacy

-0.37

Correlation Coefficient

Hsin Ba  De Licacy

Very good diversification

The 3 months correlation between Hsin and 1464 is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Hsin Ba Ba and De Licacy Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on De Licacy Industrial and Hsin Ba 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 Hsin Ba Ba are associated (or correlated) with De Licacy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of De Licacy Industrial has no effect on the direction of Hsin Ba i.e., Hsin Ba and De Licacy go up and down completely randomly.

Pair Corralation between Hsin Ba and De Licacy

Assuming the 90 days trading horizon Hsin Ba Ba is expected to under-perform the De Licacy. In addition to that, Hsin Ba is 1.13 times more volatile than De Licacy Industrial. It trades about -0.08 of its total potential returns per unit of risk. De Licacy Industrial is currently generating about 0.09 per unit of volatility. If you would invest  1,650  in De Licacy Industrial on December 29, 2024 and sell it today you would earn a total of  145.00  from holding De Licacy Industrial or generate 8.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.25%
Values	Daily Returns

Hsin Ba Ba  vs.  De Licacy Industrial

Hsin Ba Ba

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hsin Ba Ba 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.

De Licacy Industrial

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in De Licacy Industrial are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, De Licacy may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Hsin Ba and De Licacy

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

The idea behind Hsin Ba Ba and De Licacy Industrial 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.