Correlation Between KHVATEC CoLtd and Humax Holdings
Can any of the company-specific risk be diversified away by investing in both KHVATEC CoLtd and Humax Holdings 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 KHVATEC CoLtd and Humax Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KHVATEC CoLtd and Humax Holdings Co, you can compare the effects of market volatilities on KHVATEC CoLtd and Humax Holdings 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 KHVATEC CoLtd with a short position of Humax Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of KHVATEC CoLtd and Humax Holdings.
Diversification Opportunities for KHVATEC CoLtd and Humax Holdings
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between KHVATEC and Humax is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding KHVATEC CoLtd and Humax Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humax Holdings and KHVATEC CoLtd 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 KHVATEC CoLtd are associated (or correlated) with Humax Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humax Holdings has no effect on the direction of KHVATEC CoLtd i.e., KHVATEC CoLtd and Humax Holdings go up and down completely randomly.
Pair Corralation between KHVATEC CoLtd and Humax Holdings
Assuming the 90 days trading horizon KHVATEC CoLtd is expected to under-perform the Humax Holdings. But the stock apears to be less risky and, when comparing its historical volatility, KHVATEC CoLtd is 1.95 times less risky than Humax Holdings. The stock trades about -0.02 of its potential returns per unit of risk. The Humax Holdings Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 343,000 in Humax Holdings Co on November 2, 2024 and sell it today you would lose (14,000) from holding Humax Holdings Co or give up 4.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KHVATEC CoLtd vs. Humax Holdings Co
Performance |
| Timeline |
| KHVATEC CoLtd |
| Humax Holdings |
KHVATEC CoLtd and Humax Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KHVATEC CoLtd and Humax Holdings
The main advantage of trading using opposite KHVATEC CoLtd and Humax Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KHVATEC CoLtd position performs unexpectedly, Humax Holdings 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 Humax Holdings will offset losses from the drop in Humax Holdings' long position.| KHVATEC CoLtd vs. Seoul Semiconductor Co | KHVATEC CoLtd vs. Interflex Co | KHVATEC CoLtd vs. Intops Co | KHVATEC CoLtd vs. Kmw Inc |
| Humax Holdings vs. Solution Advanced Technology | Humax Holdings vs. Adaptive Plasma Technology | Humax Holdings vs. Seoam Machinery Industry | Humax Holdings vs. Seohee Construction Co |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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