Correlation Between Hana Microelectronics and Bluebik Group

Can any of the company-specific risk be diversified away by investing in both Hana Microelectronics and Bluebik Group 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 Hana Microelectronics and Bluebik Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hana Microelectronics Public and Bluebik Group PCL, you can compare the effects of market volatilities on Hana Microelectronics and Bluebik Group 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 Hana Microelectronics with a short position of Bluebik Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Microelectronics and Bluebik Group.

Diversification Opportunities for Hana Microelectronics and Bluebik Group

-0.41

Correlation Coefficient

Hana Microelectronics  Bluebik Group

Very good diversification

The 3 months correlation between Hana and Bluebik is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Hana Microelectronics Public and Bluebik Group PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluebik Group PCL and Hana Microelectronics 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 Hana Microelectronics Public are associated (or correlated) with Bluebik Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluebik Group PCL has no effect on the direction of Hana Microelectronics i.e., Hana Microelectronics and Bluebik Group go up and down completely randomly.

Pair Corralation between Hana Microelectronics and Bluebik Group

Assuming the 90 days trading horizon Hana Microelectronics Public is expected to generate 1.3 times more return on investment than Bluebik Group. However, Hana Microelectronics is 1.3 times more volatile than Bluebik Group PCL. It trades about -0.14 of its potential returns per unit of risk. Bluebik Group PCL is currently generating about -0.32 per unit of risk. If you would invest  2,775  in Hana Microelectronics Public on September 28, 2024 and sell it today you would lose (225.00) from holding Hana Microelectronics Public or give up 8.11% of portfolio value over 90 days.

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

Hana Microelectronics Public  vs.  Bluebik Group PCL

Hana Microelectronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hana Microelectronics Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Bluebik Group PCL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bluebik Group PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Bluebik Group is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Hana Microelectronics and Bluebik Group

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

The idea behind Hana Microelectronics Public and Bluebik Group PCL 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.

Check out your portfolio center.

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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.