Correlation Between Hua Hong and CEOTRONICS

Specify exactly 2 symbols:
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 Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Hua Hong Semiconductor  vs.  CEOTRONICS

 Performance 
       Timeline  
Hua Hong Semiconductor 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Hua Hong Semiconductor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Hua Hong is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
CEOTRONICS 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days CEOTRONICS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

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.
The idea behind Hua Hong Semiconductor and CEOTRONICS 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

Other Complementary Tools

Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format