Correlation Between Asia Technology and HB Technology
Can any of the company-specific risk be diversified away by investing in both Asia Technology 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 Asia Technology and HB Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Technology Co and HB Technology TD, you can compare the effects of market volatilities on Asia Technology 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 Asia Technology with a short position of HB Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Technology and HB Technology.
Diversification Opportunities for Asia Technology and HB Technology
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asia and 078150 is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Asia Technology 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 Asia Technology 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 Asia Technology 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 Asia Technology i.e., Asia Technology and HB Technology go up and down completely randomly.
Pair Corralation between Asia Technology and HB Technology
Assuming the 90 days trading horizon Asia Technology Co is expected to generate 0.68 times more return on investment than HB Technology. However, Asia Technology Co is 1.47 times less risky than HB Technology. It trades about 0.03 of its potential returns per unit of risk. HB Technology TD is currently generating about -0.2 per unit of risk. If you would invest 220,000 in Asia Technology Co on August 31, 2024 and sell it today you would earn a total of 2,500 from holding Asia Technology Co or generate 1.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Asia Technology Co vs. HB Technology TD
Performance |
| Timeline |
| Asia Technology |
| HB Technology TD |
Asia Technology and HB Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Technology and HB Technology
The main advantage of trading using opposite Asia Technology and HB Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Technology 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.| Asia Technology vs. Korea New Network | Asia Technology vs. ICD Co | Asia Technology vs. DYPNF CoLtd | Asia Technology vs. Busan Industrial Co |
| 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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