Correlation Between Daejoo and HB Technology
Can any of the company-specific risk be diversified away by investing in both Daejoo and HB Technology 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 Daejoo and HB Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daejoo Inc and HB Technology TD, you can compare the effects of market volatilities on Daejoo and HB Technology 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 Daejoo with a short position of HB Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daejoo and HB Technology.
Diversification Opportunities for Daejoo and HB Technology
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daejoo and 078150 is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Daejoo Inc and HB Technology TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HB Technology TD and Daejoo 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 Daejoo Inc are associated (or correlated) with HB Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HB Technology TD has no effect on the direction of Daejoo i.e., Daejoo and HB Technology go up and down completely randomly.
Pair Corralation between Daejoo and HB Technology
Assuming the 90 days trading horizon Daejoo is expected to generate 16.66 times less return on investment than HB Technology. But when comparing it to its historical volatility, Daejoo Inc is 3.67 times less risky than HB Technology. It trades about 0.09 of its potential returns per unit of risk. HB Technology TD is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 199,600 in HB Technology TD on October 22, 2024 and sell it today you would earn a total of 59,900 from holding HB Technology TD or generate 30.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daejoo Inc vs. HB Technology TD
Performance |
| Timeline |
| Daejoo Inc |
| HB Technology TD |
Daejoo and HB Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daejoo and HB Technology
The main advantage of trading using opposite Daejoo and HB Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daejoo position performs unexpectedly, HB Technology 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 HB Technology will offset losses from the drop in HB Technology's long position.| Daejoo vs. Lake Materials Co | Daejoo vs. National Plastic Co | Daejoo vs. Choil Aluminum | Daejoo vs. Green Cross Medical |
| HB Technology vs. System and Application | HB Technology vs. DataSolution | HB Technology vs. Moadata Co | HB Technology vs. NICE Information Service |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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