Correlation Between Semyung Electric and Haitai Confectionery
Can any of the company-specific risk be diversified away by investing in both Semyung Electric 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 Semyung Electric and Haitai Confectionery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Semyung Electric Machinery and Haitai Confectionery Foods, you can compare the effects of market volatilities on Semyung Electric 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 Semyung Electric with a short position of Haitai Confectionery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semyung Electric and Haitai Confectionery.
Diversification Opportunities for Semyung Electric and Haitai Confectionery
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Semyung and Haitai is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Semyung Electric Machinery and Haitai Confectionery Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haitai Confectionery and Semyung Electric 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 Semyung Electric Machinery 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 Semyung Electric i.e., Semyung Electric and Haitai Confectionery go up and down completely randomly.
Pair Corralation between Semyung Electric and Haitai Confectionery
Assuming the 90 days trading horizon Semyung Electric Machinery is expected to generate 1.74 times more return on investment than Haitai Confectionery. However, Semyung Electric is 1.74 times more volatile than Haitai Confectionery Foods. It trades about 0.04 of its potential returns per unit of risk. Haitai Confectionery Foods is currently generating about 0.0 per unit of risk. If you would invest 308,924 in Semyung Electric Machinery on September 5, 2024 and sell it today you would earn a total of 149,076 from holding Semyung Electric Machinery or generate 48.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Semyung Electric Machinery vs. Haitai Confectionery Foods
Performance |
| Timeline |
| Semyung Electric Mac |
| Haitai Confectionery |
Semyung Electric and Haitai Confectionery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Semyung Electric and Haitai Confectionery
The main advantage of trading using opposite Semyung Electric and Haitai Confectionery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semyung Electric 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.| Semyung Electric vs. PLAYWITH | Semyung Electric vs. Hyundai Engineering Plastics | Semyung Electric vs. Hana Materials | Semyung Electric vs. Lake Materials Co |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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