Correlation Between Eagon Industrial and Haitai Confectionery
Can any of the company-specific risk be diversified away by investing in both Eagon Industrial 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 Eagon Industrial and Haitai Confectionery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagon Industrial Co and Haitai Confectionery Foods, you can compare the effects of market volatilities on Eagon Industrial 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 Eagon Industrial with a short position of Haitai Confectionery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagon Industrial and Haitai Confectionery.
Diversification Opportunities for Eagon Industrial and Haitai Confectionery
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eagon and Haitai is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Eagon Industrial 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 Eagon Industrial 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 Eagon Industrial 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 Eagon Industrial i.e., Eagon Industrial and Haitai Confectionery go up and down completely randomly.
Pair Corralation between Eagon Industrial and Haitai Confectionery
Assuming the 90 days trading horizon Eagon Industrial Co is expected to generate 6.63 times more return on investment than Haitai Confectionery. However, Eagon Industrial is 6.63 times more volatile than Haitai Confectionery Foods. It trades about 0.14 of its potential returns per unit of risk. Haitai Confectionery Foods is currently generating about -0.21 per unit of risk. If you would invest 510,981 in Eagon Industrial Co on October 24, 2024 and sell it today you would earn a total of 86,019 from holding Eagon Industrial Co or generate 16.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagon Industrial Co vs. Haitai Confectionery Foods
Performance |
| Timeline |
| Eagon Industrial |
| Haitai Confectionery |
Eagon Industrial and Haitai Confectionery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagon Industrial and Haitai Confectionery
The main advantage of trading using opposite Eagon Industrial and Haitai Confectionery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagon Industrial 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.| Eagon Industrial vs. Iljin Display | Eagon Industrial vs. Samyang Foods Co | Eagon Industrial vs. Sangsin Energy Display | Eagon Industrial vs. LG Display Co |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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