Correlation Between HB Technology and Daejoo
Can any of the company-specific risk be diversified away by investing in both HB Technology and Daejoo 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 HB Technology and Daejoo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HB Technology TD and Daejoo Inc, you can compare the effects of market volatilities on HB Technology and Daejoo 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 HB Technology with a short position of Daejoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of HB Technology and Daejoo.
Diversification Opportunities for HB Technology and Daejoo
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 078150 and Daejoo is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding HB Technology TD and Daejoo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daejoo Inc and HB 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 HB Technology TD are associated (or correlated) with Daejoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daejoo Inc has no effect on the direction of HB Technology i.e., HB Technology and Daejoo go up and down completely randomly.
Pair Corralation between HB Technology and Daejoo
Assuming the 90 days trading horizon HB Technology TD is expected to under-perform the Daejoo. In addition to that, HB Technology is 2.21 times more volatile than Daejoo Inc. It trades about -0.01 of its total potential returns per unit of risk. Daejoo Inc is currently generating about 0.24 per unit of volatility. If you would invest 130,500 in Daejoo Inc on September 14, 2024 and sell it today you would earn a total of 14,100 from holding Daejoo Inc or generate 10.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
HB Technology TD vs. Daejoo Inc
Performance |
| Timeline |
| HB Technology TD |
| Daejoo Inc |
HB Technology and Daejoo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HB Technology and Daejoo
The main advantage of trading using opposite HB Technology and Daejoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HB Technology position performs unexpectedly, Daejoo 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 Daejoo will offset losses from the drop in Daejoo's long position.| HB Technology vs. Cube Entertainment | HB Technology vs. Dreamus Company | HB Technology vs. LG Energy Solution | HB Technology vs. Dongwon System |
| Daejoo vs. HB Technology TD | Daejoo vs. People Technology | Daejoo vs. CKH Food Health | Daejoo vs. Dong A Steel Technology |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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