Correlation Between Hua Hong and CEOTRONICS
Can any of the company-specific risk be diversified away by investing in both Hua Hong and CEOTRONICS 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 Hua Hong and CEOTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hua Hong Semiconductor and CEOTRONICS, you can compare the effects of market volatilities on Hua Hong and CEOTRONICS 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 Hua Hong with a short position of CEOTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hua Hong and CEOTRONICS.
Diversification Opportunities for Hua Hong and CEOTRONICS
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hua and CEOTRONICS is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Hua Hong Semiconductor and CEOTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEOTRONICS and Hua Hong 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 Hua Hong Semiconductor are associated (or correlated) with CEOTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEOTRONICS has no effect on the direction of Hua Hong i.e., Hua Hong and CEOTRONICS go up and down completely randomly.
Pair Corralation between Hua Hong and CEOTRONICS
Assuming the 90 days horizon Hua Hong Semiconductor is expected to generate 0.8 times more return on investment than CEOTRONICS. However, Hua Hong Semiconductor is 1.25 times less risky than CEOTRONICS. It trades about -0.03 of its potential returns per unit of risk. CEOTRONICS is currently generating about -0.03 per unit of risk. If you would invest 428.00 in Hua Hong Semiconductor on April 23, 2025 and sell it today you would lose (38.00) from holding Hua Hong Semiconductor or give up 8.88% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hua Hong Semiconductor vs. CEOTRONICS
Performance |
Timeline |
Hua Hong Semiconductor |
CEOTRONICS |
Hua Hong and CEOTRONICS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hua Hong and CEOTRONICS
The main advantage of trading using opposite Hua Hong and CEOTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hua Hong position performs unexpectedly, CEOTRONICS 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 CEOTRONICS will offset losses from the drop in CEOTRONICS's long position.Hua Hong vs. United Utilities Group | Hua Hong vs. Iridium Communications | Hua Hong vs. Charter Communications | Hua Hong vs. KAUFMAN ET BROAD |
CEOTRONICS vs. HK Electric Investments | CEOTRONICS vs. Virtus Investment Partners | CEOTRONICS vs. CLEAN ENERGY FUELS | CEOTRONICS vs. United Microelectronics Corp |
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.
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