Correlation Between HB Technology and KG Eco
Can any of the company-specific risk be diversified away by investing in both HB Technology and KG Eco 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 KG Eco 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 KG Eco Technology, you can compare the effects of market volatilities on HB Technology and KG Eco 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 KG Eco. Check out your portfolio center. Please also check ongoing floating volatility patterns of HB Technology and KG Eco.
Diversification Opportunities for HB Technology and KG Eco
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 078150 and 151860 is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding HB Technology TD and KG Eco Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KG Eco 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 KG Eco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KG Eco Technology has no effect on the direction of HB Technology i.e., HB Technology and KG Eco go up and down completely randomly.
Pair Corralation between HB Technology and KG Eco
Assuming the 90 days trading horizon HB Technology TD is expected to generate 1.08 times more return on investment than KG Eco. However, HB Technology is 1.08 times more volatile than KG Eco Technology. It trades about 0.02 of its potential returns per unit of risk. KG Eco Technology is currently generating about -0.02 per unit of risk. If you would invest 188,422 in HB Technology TD on September 14, 2024 and sell it today you would lose (5,022) from holding HB Technology TD or give up 2.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
HB Technology TD vs. KG Eco Technology
Performance |
| Timeline |
| HB Technology TD |
| KG Eco Technology |
HB Technology and KG Eco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HB Technology and KG Eco
The main advantage of trading using opposite HB Technology and KG Eco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HB Technology position performs unexpectedly, KG Eco 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 KG Eco will offset losses from the drop in KG Eco's long position.| HB Technology vs. Cube Entertainment | HB Technology vs. Dreamus Company | HB Technology vs. LG Energy Solution | HB Technology vs. Dongwon System |
| KG Eco vs. Samsung Electronics Co | KG Eco vs. Samsung Electronics Co | KG Eco vs. Naver | KG Eco vs. SK Hynix |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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