Correlation Between Himax Technologies and Intel

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

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

Diversification Opportunities for Himax Technologies and Intel

0.78

Correlation Coefficient

Himax Technologies  Intel

Poor diversification

The 3 months correlation between Himax and Intel is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Himax Technologies and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and Himax Technologies 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 Himax Technologies are associated (or correlated) with Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of Himax Technologies i.e., Himax Technologies and Intel go up and down completely randomly.

Pair Corralation between Himax Technologies and Intel

Given the investment horizon of 90 days Himax Technologies is expected to generate 0.65 times more return on investment than Intel. However, Himax Technologies is 1.54 times less risky than Intel. It trades about -0.15 of its potential returns per unit of risk. Intel is currently generating about -0.42 per unit of risk. If you would invest  553.00  in Himax Technologies on February 9, 2024 and sell it today you would lose (31.00) from holding Himax Technologies or give up 5.61% of portfolio value over 90 days.

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

Himax Technologies  vs.  Intel

Himax Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Himax Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, Himax Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Intel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in June 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Himax Technologies and Intel

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

The idea behind Himax Technologies and Intel 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.