Correlation Between Himax Technologies and Maxeon Solar

Can any of the company-specific risk be diversified away by investing in both Himax Technologies and Maxeon Solar 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 Himax Technologies and Maxeon Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Himax Technologies and Maxeon Solar Technologies, you can compare the effects of market volatilities on Himax Technologies and Maxeon Solar 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 Himax Technologies with a short position of Maxeon Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Himax Technologies and Maxeon Solar.

Diversification Opportunities for Himax Technologies and Maxeon Solar

-0.61

Correlation Coefficient

Himax Technologies  Maxeon Solar

Excellent diversification

The 3 months correlation between Himax and Maxeon is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Himax Technologies and Maxeon Solar Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maxeon Solar Technologies and Himax Technologies 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 Himax Technologies are associated (or correlated) with Maxeon Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maxeon Solar Technologies has no effect on the direction of Himax Technologies i.e., Himax Technologies and Maxeon Solar go up and down completely randomly.

Pair Corralation between Himax Technologies and Maxeon Solar

Given the investment horizon of 90 days Himax Technologies is expected to generate 0.25 times more return on investment than Maxeon Solar. However, Himax Technologies is 3.94 times less risky than Maxeon Solar. It trades about 0.15 of its potential returns per unit of risk. Maxeon Solar Technologies is currently generating about 0.01 per unit of risk. If you would invest  542.00  in Himax Technologies on September 12, 2024 and sell it today you would earn a total of  139.00  from holding Himax Technologies or generate 25.65% return on investment over 90 days.

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

Himax Technologies  vs.  Maxeon Solar Technologies

Himax Technologies

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Himax Technologies are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak primary indicators, Himax Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Maxeon Solar Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maxeon Solar Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very unfluctuating basic indicators, Maxeon Solar may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Himax Technologies and Maxeon Solar

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

The idea behind Himax Technologies and Maxeon Solar Technologies 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.