Correlation Between HLB Pharmaceutical and Korean Drug
Can any of the company-specific risk be diversified away by investing in both HLB Pharmaceutical and Korean Drug 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 HLB Pharmaceutical and Korean Drug into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HLB Pharmaceutical Co and Korean Drug Co, you can compare the effects of market volatilities on HLB Pharmaceutical and Korean Drug 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 HLB Pharmaceutical with a short position of Korean Drug. Check out your portfolio center. Please also check ongoing floating volatility patterns of HLB Pharmaceutical and Korean Drug.
Diversification Opportunities for HLB Pharmaceutical and Korean Drug
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between HLB and Korean is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding HLB Pharmaceutical Co and Korean Drug Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korean Drug and HLB Pharmaceutical 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 HLB Pharmaceutical Co are associated (or correlated) with Korean Drug. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korean Drug has no effect on the direction of HLB Pharmaceutical i.e., HLB Pharmaceutical and Korean Drug go up and down completely randomly.
Pair Corralation between HLB Pharmaceutical and Korean Drug
Assuming the 90 days trading horizon HLB Pharmaceutical Co is expected to generate 2.48 times more return on investment than Korean Drug. However, HLB Pharmaceutical is 2.48 times more volatile than Korean Drug Co. It trades about 0.05 of its potential returns per unit of risk. Korean Drug Co is currently generating about -0.05 per unit of risk. If you would invest 1,255,000 in HLB Pharmaceutical Co on September 28, 2024 and sell it today you would earn a total of 965,000 from holding HLB Pharmaceutical Co or generate 76.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
HLB Pharmaceutical Co vs. Korean Drug Co
Performance |
| Timeline |
| HLB Pharmaceutical |
| Korean Drug |
HLB Pharmaceutical and Korean Drug Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HLB Pharmaceutical and Korean Drug
The main advantage of trading using opposite HLB Pharmaceutical and Korean Drug positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HLB Pharmaceutical position performs unexpectedly, Korean Drug 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 Korean Drug will offset losses from the drop in Korean Drug's long position.| HLB Pharmaceutical vs. Kolon Life Science | HLB Pharmaceutical vs. JETEMA Co | HLB Pharmaceutical vs. Aminologics CoLtd | HLB Pharmaceutical vs. Withuspharmaceutical CoLtd |
| Korean Drug vs. Dgb Financial | Korean Drug vs. Koryo Credit Information | Korean Drug vs. Dongbu Insurance Co | Korean Drug vs. Daishin Information Communications |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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