Correlation Between Hanshin Construction and Haitai Confectionery
Can any of the company-specific risk be diversified away by investing in both Hanshin Construction and Haitai Confectionery 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 Hanshin Construction and Haitai Confectionery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanshin Construction Co and Haitai Confectionery Foods, you can compare the effects of market volatilities on Hanshin Construction and Haitai Confectionery 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 Hanshin Construction with a short position of Haitai Confectionery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanshin Construction and Haitai Confectionery.
Diversification Opportunities for Hanshin Construction and Haitai Confectionery
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hanshin and Haitai is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hanshin Construction Co and Haitai Confectionery Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haitai Confectionery and Hanshin Construction 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 Hanshin Construction Co are associated (or correlated) with Haitai Confectionery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haitai Confectionery has no effect on the direction of Hanshin Construction i.e., Hanshin Construction and Haitai Confectionery go up and down completely randomly.
Pair Corralation between Hanshin Construction and Haitai Confectionery
Assuming the 90 days trading horizon Hanshin Construction is expected to generate 2.78 times less return on investment than Haitai Confectionery. But when comparing it to its historical volatility, Hanshin Construction Co is 1.76 times less risky than Haitai Confectionery. It trades about 0.01 of its potential returns per unit of risk. Haitai Confectionery Foods is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 602,000 in Haitai Confectionery Foods on September 5, 2024 and sell it today you would lose (9,000) from holding Haitai Confectionery Foods or give up 1.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanshin Construction Co vs. Haitai Confectionery Foods
Performance |
| Timeline |
| Hanshin Construction |
| Haitai Confectionery |
Hanshin Construction and Haitai Confectionery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanshin Construction and Haitai Confectionery
The main advantage of trading using opposite Hanshin Construction and Haitai Confectionery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanshin Construction position performs unexpectedly, Haitai Confectionery 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 Haitai Confectionery will offset losses from the drop in Haitai Confectionery's long position.| Hanshin Construction vs. DB Insurance Co | Hanshin Construction vs. Aprogen Healthcare Games | Hanshin Construction vs. NewFlex Technology Co | Hanshin Construction vs. Global Standard Technology |
| Haitai Confectionery vs. AptaBio Therapeutics | Haitai Confectionery vs. Daewoo SBI SPAC | Haitai Confectionery vs. Dream Security co | Haitai Confectionery vs. Microfriend |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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