Correlation Between HB Technology and Amogreentech
Can any of the company-specific risk be diversified away by investing in both HB Technology and Amogreentech 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 Amogreentech 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 Amogreentech Co, you can compare the effects of market volatilities on HB Technology and Amogreentech 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 Amogreentech. Check out your portfolio center. Please also check ongoing floating volatility patterns of HB Technology and Amogreentech.
Diversification Opportunities for HB Technology and Amogreentech
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 078150 and Amogreentech is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding HB Technology TD and Amogreentech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amogreentech 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 Amogreentech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amogreentech has no effect on the direction of HB Technology i.e., HB Technology and Amogreentech go up and down completely randomly.
Pair Corralation between HB Technology and Amogreentech
Assuming the 90 days trading horizon HB Technology TD is expected to under-perform the Amogreentech. But the stock apears to be less risky and, when comparing its historical volatility, HB Technology TD is 1.2 times less risky than Amogreentech. The stock trades about -0.16 of its potential returns per unit of risk. The Amogreentech Co is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 709,000 in Amogreentech Co on August 29, 2024 and sell it today you would lose (42,000) from holding Amogreentech Co or give up 5.92% 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. Amogreentech Co
Performance |
| Timeline |
| HB Technology TD |
| Amogreentech |
HB Technology and Amogreentech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HB Technology and Amogreentech
The main advantage of trading using opposite HB Technology and Amogreentech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HB Technology position performs unexpectedly, Amogreentech 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 Amogreentech will offset losses from the drop in Amogreentech's long position.| HB Technology vs. Korea Real Estate | HB Technology vs. Korea Ratings Co | HB Technology vs. IQuest Co | HB Technology vs. Wonbang Tech 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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