Correlation Between HannStar Board and Global Brands

Can any of the company-specific risk be diversified away by investing in both HannStar Board and Global Brands 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 Board and Global Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HannStar Board Corp and Global Brands Manufacture, you can compare the effects of market volatilities on HannStar Board and Global Brands 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 Board with a short position of Global Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of HannStar Board and Global Brands.

Diversification Opportunities for HannStar Board and Global Brands

0.41

Correlation Coefficient

HannStar Board  Global Brands

Very weak diversification

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

Pair Corralation between HannStar Board and Global Brands

Assuming the 90 days trading horizon HannStar Board Corp is expected to under-perform the Global Brands. But the stock apears to be less risky and, when comparing its historical volatility, HannStar Board Corp is 1.15 times less risky than Global Brands. The stock trades about -0.27 of its potential returns per unit of risk. The Global Brands Manufacture is currently generating about -0.21 of returns per unit of risk over similar time horizon. If you would invest  5,870  in Global Brands Manufacture on September 5, 2024 and sell it today you would lose (390.00) from holding Global Brands Manufacture or give up 6.64% of portfolio value over 90 days.

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

HannStar Board Corp  vs.  Global Brands Manufacture

HannStar Board Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HannStar Board Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, HannStar Board is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Global Brands Manufacture

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with HannStar Board and Global Brands

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

The idea behind HannStar Board Corp and Global Brands Manufacture 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.