Correlation Between HB Technology and Leaders Technology
Can any of the company-specific risk be diversified away by investing in both HB Technology and Leaders 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 HB Technology and Leaders Technology 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 Leaders Technology Investment, you can compare the effects of market volatilities on HB Technology and Leaders 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 HB Technology with a short position of Leaders Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of HB Technology and Leaders Technology.
Diversification Opportunities for HB Technology and Leaders Technology
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 078150 and Leaders is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding HB Technology TD and Leaders Technology Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leaders Technology 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 Leaders Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leaders Technology has no effect on the direction of HB Technology i.e., HB Technology and Leaders Technology go up and down completely randomly.
Pair Corralation between HB Technology and Leaders Technology
Assuming the 90 days trading horizon HB Technology TD is expected to generate 1.0 times more return on investment than Leaders Technology. However, HB Technology TD is 1.0 times less risky than Leaders Technology. It trades about 0.57 of its potential returns per unit of risk. Leaders Technology Investment is currently generating about 0.1 per unit of risk. If you would invest 166,300 in HB Technology TD on October 11, 2024 and sell it today you would earn a total of 83,200 from holding HB Technology TD or generate 50.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
HB Technology TD vs. Leaders Technology Investment
Performance |
| Timeline |
| HB Technology TD |
| Leaders Technology |
HB Technology and Leaders Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HB Technology and Leaders Technology
The main advantage of trading using opposite HB Technology and Leaders Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HB Technology position performs unexpectedly, Leaders 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 Leaders Technology will offset losses from the drop in Leaders Technology's long position.| HB Technology vs. Seoyon Topmetal Co | HB Technology vs. PJ Electronics Co | HB Technology vs. Eagon Industrial Co | HB Technology vs. DoubleU Games Co |
| Leaders Technology vs. Korea Information Engineering | Leaders Technology vs. PI Advanced Materials | Leaders Technology vs. Koryo Credit Information | Leaders Technology vs. RF Materials 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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