Correlation Between GS Engineering and Haitai Confectionery
Can any of the company-specific risk be diversified away by investing in both GS Engineering 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 GS Engineering and Haitai Confectionery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GS Engineering Construction and Haitai Confectionery Foods, you can compare the effects of market volatilities on GS Engineering 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 GS Engineering with a short position of Haitai Confectionery. Check out your portfolio center. Please also check ongoing floating volatility patterns of GS Engineering and Haitai Confectionery.
Diversification Opportunities for GS Engineering and Haitai Confectionery
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 006360 and Haitai is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding GS Engineering Construction and Haitai Confectionery Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haitai Confectionery and GS Engineering 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 GS Engineering Construction 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 GS Engineering i.e., GS Engineering and Haitai Confectionery go up and down completely randomly.
Pair Corralation between GS Engineering and Haitai Confectionery
Assuming the 90 days trading horizon GS Engineering Construction is expected to generate 1.67 times more return on investment than Haitai Confectionery. However, GS Engineering is 1.67 times more volatile than Haitai Confectionery Foods. It trades about 0.17 of its potential returns per unit of risk. Haitai Confectionery Foods is currently generating about 0.22 per unit of risk. If you would invest 1,726,000 in GS Engineering Construction on November 27, 2024 and sell it today you would earn a total of 119,000 from holding GS Engineering Construction or generate 6.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GS Engineering Construction vs. Haitai Confectionery Foods
Performance |
| Timeline |
| GS Engineering Const |
| Haitai Confectionery |
GS Engineering and Haitai Confectionery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GS Engineering and Haitai Confectionery
The main advantage of trading using opposite GS Engineering and Haitai Confectionery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GS Engineering 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.| GS Engineering vs. Korean Reinsurance Co | GS Engineering vs. Daechang Steel Co | GS Engineering vs. DataSolution | GS Engineering vs. Samsung Life Insurance |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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