Correlation Between HB Technology and VAIV
Can any of the company-specific risk be diversified away by investing in both HB Technology and VAIV 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 VAIV 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 VAIV Co, you can compare the effects of market volatilities on HB Technology and VAIV 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 VAIV. Check out your portfolio center. Please also check ongoing floating volatility patterns of HB Technology and VAIV.
Diversification Opportunities for HB Technology and VAIV
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between 078150 and VAIV is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding HB Technology TD and VAIV Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VAIV 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 VAIV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VAIV has no effect on the direction of HB Technology i.e., HB Technology and VAIV go up and down completely randomly.
Pair Corralation between HB Technology and VAIV
Assuming the 90 days trading horizon HB Technology TD is expected to generate 1.33 times more return on investment than VAIV. However, HB Technology is 1.33 times more volatile than VAIV Co. It trades about -0.06 of its potential returns per unit of risk. VAIV Co is currently generating about -0.09 per unit of risk. If you would invest 318,000 in HB Technology TD on August 28, 2024 and sell it today you would lose (113,000) from holding HB Technology TD or give up 35.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HB Technology TD vs. VAIV Co
Performance |
| Timeline |
| HB Technology TD |
| VAIV |
HB Technology and VAIV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HB Technology and VAIV
The main advantage of trading using opposite HB Technology and VAIV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HB Technology position performs unexpectedly, VAIV 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 VAIV will offset losses from the drop in VAIV'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 |
| VAIV vs. HB Technology TD | VAIV vs. Kbi Metal Co | VAIV vs. Kukil Metal Co | VAIV vs. Global Standard Technology |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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