Correlation Between Hota Industrial and Sinbon Electronics

Can any of the company-specific risk be diversified away by investing in both Hota Industrial and Sinbon Electronics 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 Hota Industrial and Sinbon Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hota Industrial Mfg and Sinbon Electronics Co, you can compare the effects of market volatilities on Hota Industrial and Sinbon Electronics 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 Hota Industrial with a short position of Sinbon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hota Industrial and Sinbon Electronics.

Diversification Opportunities for Hota Industrial and Sinbon Electronics

0.0

Correlation Coefficient

Hota Industrial  Sinbon Electronics

Pay attention - limited upside

The 3 months correlation between Hota and Sinbon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hota Industrial Mfg and Sinbon Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinbon Electronics and Hota Industrial 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 Hota Industrial Mfg are associated (or correlated) with Sinbon Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinbon Electronics has no effect on the direction of Hota Industrial i.e., Hota Industrial and Sinbon Electronics go up and down completely randomly.

Pair Corralation between Hota Industrial and Sinbon Electronics

Assuming the 90 days trading horizon Hota Industrial Mfg is expected to generate 1.84 times more return on investment than Sinbon Electronics. However, Hota Industrial is 1.84 times more volatile than Sinbon Electronics Co. It trades about 0.0 of its potential returns per unit of risk. Sinbon Electronics Co is currently generating about -0.14 per unit of risk. If you would invest  6,720  in Hota Industrial Mfg on September 2, 2024 and sell it today you would lose (260.00) from holding Hota Industrial Mfg or give up 3.87% of portfolio value over 90 days.

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

Hota Industrial Mfg  vs.  Sinbon Electronics Co

Hota Industrial Mfg

Risk-Adjusted Performance

0 of 100

Very Weak

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

Sinbon Electronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sinbon Electronics Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Hota Industrial and Sinbon Electronics

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

The idea behind Hota Industrial Mfg and Sinbon Electronics 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.