Correlation Between Haesung Industrial and Haitai Confectionery
Can any of the company-specific risk be diversified away by investing in both Haesung Industrial 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 Haesung Industrial and Haitai Confectionery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haesung Industrial Co and Haitai Confectionery Foods, you can compare the effects of market volatilities on Haesung Industrial 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 Haesung Industrial with a short position of Haitai Confectionery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haesung Industrial and Haitai Confectionery.
Diversification Opportunities for Haesung Industrial and Haitai Confectionery
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Haesung and Haitai is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Haesung Industrial 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 Haesung Industrial 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 Haesung Industrial 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 Haesung Industrial i.e., Haesung Industrial and Haitai Confectionery go up and down completely randomly.
Pair Corralation between Haesung Industrial and Haitai Confectionery
Assuming the 90 days trading horizon Haesung Industrial Co is expected to under-perform the Haitai Confectionery. But the stock apears to be less risky and, when comparing its historical volatility, Haesung Industrial Co is 1.55 times less risky than Haitai Confectionery. The stock trades about -0.06 of its potential returns per unit of risk. The Haitai Confectionery Foods is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 593,792 in Haitai Confectionery Foods on August 27, 2024 and sell it today you would lose (11,792) from holding Haitai Confectionery Foods or give up 1.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haesung Industrial Co vs. Haitai Confectionery Foods
Performance |
| Timeline |
| Haesung Industrial |
| Haitai Confectionery |
Haesung Industrial and Haitai Confectionery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haesung Industrial and Haitai Confectionery
The main advantage of trading using opposite Haesung Industrial and Haitai Confectionery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haesung Industrial 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.| Haesung Industrial vs. Busan Industrial Co | Haesung Industrial vs. Busan Ind | Haesung Industrial vs. Mirae Asset Daewoo | Haesung Industrial vs. UNISEM 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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