Correlation Between HB Technology and Sewoon Medical
Can any of the company-specific risk be diversified away by investing in both HB Technology and Sewoon Medical 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 Sewoon Medical 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 Sewoon Medical Co, you can compare the effects of market volatilities on HB Technology and Sewoon Medical 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 Sewoon Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of HB Technology and Sewoon Medical.
Diversification Opportunities for HB Technology and Sewoon Medical
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 078150 and Sewoon is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding HB Technology TD and Sewoon Medical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sewoon Medical 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 Sewoon Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sewoon Medical has no effect on the direction of HB Technology i.e., HB Technology and Sewoon Medical go up and down completely randomly.
Pair Corralation between HB Technology and Sewoon Medical
Assuming the 90 days trading horizon HB Technology TD is expected to under-perform the Sewoon Medical. In addition to that, HB Technology is 1.64 times more volatile than Sewoon Medical Co. It trades about -0.24 of its total potential returns per unit of risk. Sewoon Medical Co is currently generating about -0.18 per unit of volatility. If you would invest 275,000 in Sewoon Medical Co on August 25, 2024 and sell it today you would lose (19,500) from holding Sewoon Medical Co or give up 7.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HB Technology TD vs. Sewoon Medical Co
Performance |
| Timeline |
| HB Technology TD |
| Sewoon Medical |
HB Technology and Sewoon Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HB Technology and Sewoon Medical
The main advantage of trading using opposite HB Technology and Sewoon Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HB Technology position performs unexpectedly, Sewoon Medical 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 Sewoon Medical will offset losses from the drop in Sewoon Medical's long position.| HB Technology vs. Daishin Information Communications | HB Technology vs. Korea Information Communications | HB Technology vs. Nice Information Telecommunication | HB Technology vs. Youngsin Metal Industrial |
| Sewoon Medical vs. Medy Tox | Sewoon Medical vs. Genexine | Sewoon Medical vs. Busan Industrial Co | Sewoon Medical vs. Busan Ind |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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