Correlation Between HB Technology and Hannong Chemicals
Can any of the company-specific risk be diversified away by investing in both HB Technology and Hannong Chemicals 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 Hannong Chemicals 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 Hannong Chemicals, you can compare the effects of market volatilities on HB Technology and Hannong Chemicals 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 Hannong Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of HB Technology and Hannong Chemicals.
Diversification Opportunities for HB Technology and Hannong Chemicals
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 078150 and Hannong is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding HB Technology TD and Hannong Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hannong Chemicals 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 Hannong Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hannong Chemicals has no effect on the direction of HB Technology i.e., HB Technology and Hannong Chemicals go up and down completely randomly.
Pair Corralation between HB Technology and Hannong Chemicals
Assuming the 90 days trading horizon HB Technology is expected to generate 2.31 times less return on investment than Hannong Chemicals. But when comparing it to its historical volatility, HB Technology TD is 1.22 times less risky than Hannong Chemicals. It trades about 0.13 of its potential returns per unit of risk. Hannong Chemicals is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,302,000 in Hannong Chemicals on December 5, 2024 and sell it today you would earn a total of 398,000 from holding Hannong Chemicals or generate 30.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HB Technology TD vs. Hannong Chemicals
Performance |
| Timeline |
| HB Technology TD |
| Hannong Chemicals |
HB Technology and Hannong Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HB Technology and Hannong Chemicals
The main advantage of trading using opposite HB Technology and Hannong Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HB Technology position performs unexpectedly, Hannong Chemicals 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 Hannong Chemicals will offset losses from the drop in Hannong Chemicals' long position.| HB Technology vs. LG Household Healthcare | HB Technology vs. LG Household Healthcare | HB Technology vs. Lotte Fine Chemical | HB Technology vs. Namyang Dairy |
| Hannong Chemicals vs. Tuksu Engineering ConstructionLtd | Hannong Chemicals vs. Namyang Dairy | Hannong Chemicals vs. FoodNamoo | Hannong Chemicals vs. KCC Engineering Construction |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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