Correlation Between Industrial Bank and Haitai Confectionery
Can any of the company-specific risk be diversified away by investing in both Industrial Bank 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 Industrial Bank and Haitai Confectionery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industrial Bank and Haitai Confectionery Foods, you can compare the effects of market volatilities on Industrial Bank 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 Industrial Bank with a short position of Haitai Confectionery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Bank and Haitai Confectionery.
Diversification Opportunities for Industrial Bank and Haitai Confectionery
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Industrial and Haitai is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Bank and Haitai Confectionery Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haitai Confectionery and Industrial Bank 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 Industrial Bank 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 Industrial Bank i.e., Industrial Bank and Haitai Confectionery go up and down completely randomly.
Pair Corralation between Industrial Bank and Haitai Confectionery
Assuming the 90 days trading horizon Industrial Bank is expected to generate 0.49 times more return on investment than Haitai Confectionery. However, Industrial Bank is 2.04 times less risky than Haitai Confectionery. It trades about 0.1 of its potential returns per unit of risk. Haitai Confectionery Foods is currently generating about 0.01 per unit of risk. If you would invest 957,739 in Industrial Bank on August 27, 2024 and sell it today you would earn a total of 522,261 from holding Industrial Bank or generate 54.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial Bank vs. Haitai Confectionery Foods
Performance |
| Timeline |
| Industrial Bank |
| Haitai Confectionery |
Industrial Bank and Haitai Confectionery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Bank and Haitai Confectionery
The main advantage of trading using opposite Industrial Bank and Haitai Confectionery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Bank 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.| Industrial Bank vs. Haitai Confectionery Foods | Industrial Bank vs. Shinsegae Information Communication | Industrial Bank vs. SCI Information Service | Industrial Bank vs. Ssangyong Information Communication |
| 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Stocks Directory Find actively traded stocks across global markets |