Correlation Between Hana Microelectronics and Earth Tech
Can any of the company-specific risk be diversified away by investing in both Hana Microelectronics and Earth Tech 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 Earth Tech 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 Earth Tech Environment, you can compare the effects of market volatilities on Hana Microelectronics and Earth Tech 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 Earth Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Microelectronics and Earth Tech.
Diversification Opportunities for Hana Microelectronics and Earth Tech
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hana and Earth is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Hana Microelectronics Public and Earth Tech Environment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Earth Tech Environment 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 Earth Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Earth Tech Environment has no effect on the direction of Hana Microelectronics i.e., Hana Microelectronics and Earth Tech go up and down completely randomly.
Pair Corralation between Hana Microelectronics and Earth Tech
Assuming the 90 days trading horizon Hana Microelectronics Public is expected to under-perform the Earth Tech. In addition to that, Hana Microelectronics is 1.23 times more volatile than Earth Tech Environment. It trades about -0.28 of its total potential returns per unit of risk. Earth Tech Environment is currently generating about -0.28 per unit of volatility. If you would invest 192.00 in Earth Tech Environment on September 24, 2024 and sell it today you would lose (20.00) from holding Earth Tech Environment or give up 10.42% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Hana Microelectronics Public vs. Earth Tech Environment
Performance |
Timeline |
Hana Microelectronics |
Earth Tech Environment |
Hana Microelectronics and Earth Tech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hana Microelectronics and Earth Tech
The main advantage of trading using opposite Hana Microelectronics and Earth Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Microelectronics position performs unexpectedly, Earth Tech 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 Earth Tech will offset losses from the drop in Earth Tech's long position.Hana Microelectronics vs. Jay Mart Public | Hana Microelectronics vs. Interlink Telecom Public | Hana Microelectronics vs. Forth Public |
Earth Tech vs. Gulf Energy Development | Earth Tech vs. Energy Absolute Public | Earth Tech vs. Gunkul Engineering Public | Earth Tech vs. Global Power Synergy |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data |