Correlation Between Dragonfly and HB Technology
Can any of the company-specific risk be diversified away by investing in both Dragonfly and HB Technology 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 Dragonfly and HB Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dragonfly GF Co and HB Technology TD, you can compare the effects of market volatilities on Dragonfly and HB Technology 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 Dragonfly with a short position of HB Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dragonfly and HB Technology.
Diversification Opportunities for Dragonfly and HB Technology
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dragonfly and 078150 is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Dragonfly GF Co and HB Technology TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HB Technology TD and Dragonfly 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 Dragonfly GF Co are associated (or correlated) with HB Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HB Technology TD has no effect on the direction of Dragonfly i.e., Dragonfly and HB Technology go up and down completely randomly.
Pair Corralation between Dragonfly and HB Technology
Assuming the 90 days trading horizon Dragonfly GF Co is expected to under-perform the HB Technology. But the stock apears to be less risky and, when comparing its historical volatility, Dragonfly GF Co is 1.01 times less risky than HB Technology. The stock trades about -0.06 of its potential returns per unit of risk. The HB Technology TD is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 195,782 in HB Technology TD on September 3, 2024 and sell it today you would lose (6,282) from holding HB Technology TD or give up 3.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.89% |
| Values | Daily Returns |
Dragonfly GF Co vs. HB Technology TD
Performance |
| Timeline |
| Dragonfly GF |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| HB Technology TD |
Dragonfly and HB Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dragonfly and HB Technology
The main advantage of trading using opposite Dragonfly and HB Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dragonfly position performs unexpectedly, HB Technology 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 HB Technology will offset losses from the drop in HB Technology's long position.| Dragonfly vs. Samsung Electronics Co | Dragonfly vs. Samsung Electronics Co | Dragonfly vs. LG Energy Solution | Dragonfly vs. SK Hynix |
| HB Technology vs. Dongsin Engineering Construction | HB Technology vs. Doosan Fuel Cell | HB Technology vs. Daishin Balance 1 | HB Technology vs. Total Soft Bank |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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