Correlation Between HB Technology and Seoul Electronics
Can any of the company-specific risk be diversified away by investing in both HB Technology and Seoul Electronics 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 Seoul Electronics 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 Seoul Electronics Telecom, you can compare the effects of market volatilities on HB Technology and Seoul Electronics 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 Seoul Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of HB Technology and Seoul Electronics.
Diversification Opportunities for HB Technology and Seoul Electronics
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 078150 and Seoul is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding HB Technology TD and Seoul Electronics Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoul Electronics Telecom 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 Seoul Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoul Electronics Telecom has no effect on the direction of HB Technology i.e., HB Technology and Seoul Electronics go up and down completely randomly.
Pair Corralation between HB Technology and Seoul Electronics
Assuming the 90 days trading horizon HB Technology TD is expected to generate 1.36 times more return on investment than Seoul Electronics. However, HB Technology is 1.36 times more volatile than Seoul Electronics Telecom. It trades about 0.55 of its potential returns per unit of risk. Seoul Electronics Telecom is currently generating about 0.47 per unit of risk. If you would invest 182,000 in HB Technology TD on October 12, 2024 and sell it today you would earn a total of 74,000 from holding HB Technology TD or generate 40.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HB Technology TD vs. Seoul Electronics Telecom
Performance |
| Timeline |
| HB Technology TD |
| Seoul Electronics Telecom |
HB Technology and Seoul Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HB Technology and Seoul Electronics
The main advantage of trading using opposite HB Technology and Seoul Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HB Technology position performs unexpectedly, Seoul Electronics 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 Seoul Electronics will offset losses from the drop in Seoul Electronics' 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 |
| Seoul Electronics vs. Amogreentech Co | Seoul Electronics vs. Narae Nanotech Corp | Seoul Electronics vs. HB Technology TD | Seoul Electronics vs. Samsung Publishing 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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