Correlation Between KyungIn Electronics and Haitai Confectionery
Can any of the company-specific risk be diversified away by investing in both KyungIn Electronics 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 KyungIn Electronics and Haitai Confectionery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KyungIn Electronics Co and Haitai Confectionery Foods, you can compare the effects of market volatilities on KyungIn Electronics 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 KyungIn Electronics with a short position of Haitai Confectionery. Check out your portfolio center. Please also check ongoing floating volatility patterns of KyungIn Electronics and Haitai Confectionery.
Diversification Opportunities for KyungIn Electronics and Haitai Confectionery
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between KyungIn and Haitai is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding KyungIn Electronics 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 KyungIn Electronics 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 KyungIn Electronics 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 KyungIn Electronics i.e., KyungIn Electronics and Haitai Confectionery go up and down completely randomly.
Pair Corralation between KyungIn Electronics and Haitai Confectionery
Assuming the 90 days trading horizon KyungIn Electronics is expected to generate 1.27 times less return on investment than Haitai Confectionery. In addition to that, KyungIn Electronics is 1.28 times more volatile than Haitai Confectionery Foods. It trades about 0.0 of its total potential returns per unit of risk. Haitai Confectionery Foods is currently generating about 0.01 per unit of volatility. If you would invest 629,999 in Haitai Confectionery Foods on October 14, 2024 and sell it today you would lose (27,999) from holding Haitai Confectionery Foods or give up 4.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KyungIn Electronics Co vs. Haitai Confectionery Foods
Performance |
| Timeline |
| KyungIn Electronics |
| Haitai Confectionery |
KyungIn Electronics and Haitai Confectionery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KyungIn Electronics and Haitai Confectionery
The main advantage of trading using opposite KyungIn Electronics and Haitai Confectionery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KyungIn Electronics 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.The idea behind KyungIn Electronics Co and Haitai Confectionery Foods 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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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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