Correlation Between Hon Hai and Brown Brown
Can any of the company-specific risk be diversified away by investing in both Hon Hai and Brown Brown 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 Hon Hai and Brown Brown into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hon Hai Precision and Brown Brown, you can compare the effects of market volatilities on Hon Hai and Brown Brown 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 Hon Hai with a short position of Brown Brown. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hon Hai and Brown Brown.
Diversification Opportunities for Hon Hai and Brown Brown
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hon and Brown is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Hon Hai Precision and Brown Brown in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brown Brown and Hon Hai 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 Hon Hai Precision are associated (or correlated) with Brown Brown. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brown Brown has no effect on the direction of Hon Hai i.e., Hon Hai and Brown Brown go up and down completely randomly.
Pair Corralation between Hon Hai and Brown Brown
Assuming the 90 days horizon Hon Hai Precision is expected to generate 1.56 times more return on investment than Brown Brown. However, Hon Hai is 1.56 times more volatile than Brown Brown. It trades about 0.24 of its potential returns per unit of risk. Brown Brown is currently generating about -0.14 per unit of risk. If you would invest 1,202 in Hon Hai Precision on August 2, 2025 and sell it today you would earn a total of 500.00 from holding Hon Hai Precision or generate 41.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hon Hai Precision vs. Brown Brown
Performance |
| Timeline |
| Hon Hai Precision |
| Brown Brown |
Hon Hai and Brown Brown Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hon Hai and Brown Brown
The main advantage of trading using opposite Hon Hai and Brown Brown positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hon Hai position performs unexpectedly, Brown Brown 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 Brown Brown will offset losses from the drop in Brown Brown's long position.| Hon Hai vs. AT S Austria | Hon Hai vs. alpha En | Hon Hai vs. Alps Electric Co | Hon Hai vs. Bitmine Immersion Technologies, |
| Brown Brown vs. W R Berkley | Brown Brown vs. Arch Capital Group | Brown Brown vs. Willis Towers Watson | Brown Brown vs. Raymond James Financial |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |