Correlation Between Hua Hong and Dynex Capital
Can any of the company-specific risk be diversified away by investing in both Hua Hong and Dynex Capital 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 Dynex Capital 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 Dynex Capital, you can compare the effects of market volatilities on Hua Hong and Dynex Capital 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 Dynex Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hua Hong and Dynex Capital.
Diversification Opportunities for Hua Hong and Dynex Capital
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hua and Dynex is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Hua Hong Semiconductor and Dynex Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynex Capital 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 Dynex Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynex Capital has no effect on the direction of Hua Hong i.e., Hua Hong and Dynex Capital go up and down completely randomly.
Pair Corralation between Hua Hong and Dynex Capital
Assuming the 90 days horizon Hua Hong Semiconductor is expected to generate 11.14 times more return on investment than Dynex Capital. However, Hua Hong is 11.14 times more volatile than Dynex Capital. It trades about 0.14 of its potential returns per unit of risk. Dynex Capital is currently generating about 0.21 per unit of risk. If you would invest 500.00 in Hua Hong Semiconductor on August 16, 2025 and sell it today you would earn a total of 513.00 from holding Hua Hong Semiconductor or generate 102.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.44% |
| Values | Daily Returns |
Hua Hong Semiconductor vs. Dynex Capital
Performance |
| Timeline |
| Hua Hong Semiconductor |
| Dynex Capital |
Hua Hong and Dynex Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hua Hong and Dynex Capital
The main advantage of trading using opposite Hua Hong and Dynex Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hua Hong position performs unexpectedly, Dynex Capital 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 Dynex Capital will offset losses from the drop in Dynex Capital's long position.| Hua Hong vs. Renesas Electronics | Hua Hong vs. Renesas Electronics Corp | Hua Hong vs. STMicroelectronics NV | Hua Hong vs. Lasertec |
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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