Correlation Between Humax Holdings and KHVATEC CoLtd
Can any of the company-specific risk be diversified away by investing in both Humax Holdings and KHVATEC CoLtd 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 Humax Holdings and KHVATEC CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humax Holdings Co and KHVATEC CoLtd, you can compare the effects of market volatilities on Humax Holdings and KHVATEC CoLtd 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 Humax Holdings with a short position of KHVATEC CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humax Holdings and KHVATEC CoLtd.
Diversification Opportunities for Humax Holdings and KHVATEC CoLtd
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Humax and KHVATEC is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Humax Holdings Co and KHVATEC CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KHVATEC CoLtd and Humax Holdings 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 Humax Holdings Co are associated (or correlated) with KHVATEC CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KHVATEC CoLtd has no effect on the direction of Humax Holdings i.e., Humax Holdings and KHVATEC CoLtd go up and down completely randomly.
Pair Corralation between Humax Holdings and KHVATEC CoLtd
Assuming the 90 days trading horizon Humax Holdings Co is expected to generate 2.31 times more return on investment than KHVATEC CoLtd. However, Humax Holdings is 2.31 times more volatile than KHVATEC CoLtd. It trades about 0.07 of its potential returns per unit of risk. KHVATEC CoLtd is currently generating about -0.05 per unit of risk. If you would invest 281,500 in Humax Holdings Co on October 21, 2024 and sell it today you would earn a total of 119,500 from holding Humax Holdings Co or generate 42.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humax Holdings Co vs. KHVATEC CoLtd
Performance |
| Timeline |
| Humax Holdings |
| KHVATEC CoLtd |
Humax Holdings and KHVATEC CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humax Holdings and KHVATEC CoLtd
The main advantage of trading using opposite Humax Holdings and KHVATEC CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humax Holdings position performs unexpectedly, KHVATEC CoLtd 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 KHVATEC CoLtd will offset losses from the drop in KHVATEC CoLtd's long position.| Humax Holdings vs. TOPMATERIAL LTD | Humax Holdings vs. Jeju Semiconductor Corp | Humax Holdings vs. Nable Communications | Humax Holdings vs. Solus Advanced Materials |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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