Correlation Between CSL and Hoya Corp

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

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

Diversification Opportunities for CSL and Hoya Corp

-0.6

Correlation Coefficient

CSL  Hoya Corp

Excellent diversification

The 3 months correlation between CSL and Hoya is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding CSL and Hoya Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoya Corp and CSL 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 CSL are associated (or correlated) with Hoya Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoya Corp has no effect on the direction of CSL i.e., CSL and Hoya Corp go up and down completely randomly.

Pair Corralation between CSL and Hoya Corp

Assuming the 90 days horizon CSL is expected to under-perform the Hoya Corp. In addition to that, CSL is 1.24 times more volatile than Hoya Corp. It trades about -0.09 of its total potential returns per unit of risk. Hoya Corp is currently generating about 0.12 per unit of volatility. If you would invest  12,976  in Hoya Corp on August 26, 2025 and sell it today you would earn a total of  1,959  from holding Hoya Corp or generate 15.1% return on investment over 90 days.

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

CSL  vs.  Hoya Corp

CSL

Risk-Adjusted Performance

Weakest

Over the last 90 days CSL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in December 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Hoya Corp

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Hoya Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Hoya Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CSL and Hoya Corp

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

The idea behind CSL and Hoya Corp 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.