Correlation Between Hwa Fong and Halcyon Technology
Can any of the company-specific risk be diversified away by investing in both Hwa Fong and Halcyon Technology 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 Hwa Fong and Halcyon Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hwa Fong Rubber and Halcyon Technology Public, you can compare the effects of market volatilities on Hwa Fong and Halcyon Technology 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 Hwa Fong with a short position of Halcyon Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwa Fong and Halcyon Technology.
Diversification Opportunities for Hwa Fong and Halcyon Technology
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hwa and Halcyon is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Hwa Fong Rubber and Halcyon Technology Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halcyon Technology Public and Hwa Fong 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 Hwa Fong Rubber are associated (or correlated) with Halcyon Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Halcyon Technology Public has no effect on the direction of Hwa Fong i.e., Hwa Fong and Halcyon Technology go up and down completely randomly.
Pair Corralation between Hwa Fong and Halcyon Technology
Assuming the 90 days trading horizon Hwa Fong Rubber is expected to generate 38.04 times more return on investment than Halcyon Technology. However, Hwa Fong is 38.04 times more volatile than Halcyon Technology Public. It trades about 0.13 of its potential returns per unit of risk. Halcyon Technology Public is currently generating about 0.03 per unit of risk. If you would invest 0.00 in Hwa Fong Rubber on September 3, 2024 and sell it today you would earn a total of 424.00 from holding Hwa Fong Rubber or generate 9.223372036854776E16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Hwa Fong Rubber vs. Halcyon Technology Public
Performance |
Timeline |
Hwa Fong Rubber |
Halcyon Technology Public |
Hwa Fong and Halcyon Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hwa Fong and Halcyon Technology
The main advantage of trading using opposite Hwa Fong and Halcyon Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwa Fong position performs unexpectedly, Halcyon Technology 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 Halcyon Technology will offset losses from the drop in Halcyon Technology's long position.Hwa Fong vs. Haad Thip Public | Hwa Fong vs. AAPICO Hitech Public | Hwa Fong vs. Inoue Rubber Public | Hwa Fong vs. Hana Microelectronics Public |
Halcyon Technology vs. Hwa Fong Rubber | Halcyon Technology vs. Haad Thip Public | Halcyon Technology vs. Ichitan Group Public | Halcyon Technology vs. Hana Microelectronics Public |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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