Correlation Between Kaonmedia and Haitai Confectionery
Can any of the company-specific risk be diversified away by investing in both Kaonmedia and Haitai Confectionery 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 Kaonmedia and Haitai Confectionery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaonmedia Co and Haitai Confectionery Foods, you can compare the effects of market volatilities on Kaonmedia and Haitai Confectionery 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 Kaonmedia with a short position of Haitai Confectionery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaonmedia and Haitai Confectionery.
Diversification Opportunities for Kaonmedia and Haitai Confectionery
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kaonmedia and Haitai is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Kaonmedia Co and Haitai Confectionery Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haitai Confectionery and Kaonmedia 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 Kaonmedia Co are associated (or correlated) with Haitai Confectionery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haitai Confectionery has no effect on the direction of Kaonmedia i.e., Kaonmedia and Haitai Confectionery go up and down completely randomly.
Pair Corralation between Kaonmedia and Haitai Confectionery
Assuming the 90 days trading horizon Kaonmedia Co is expected to under-perform the Haitai Confectionery. In addition to that, Kaonmedia is 1.26 times more volatile than Haitai Confectionery Foods. It trades about -0.05 of its total potential returns per unit of risk. Haitai Confectionery Foods is currently generating about 0.02 per unit of volatility. If you would invest 533,000 in Haitai Confectionery Foods on September 12, 2024 and sell it today you would earn a total of 42,000 from holding Haitai Confectionery Foods or generate 7.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kaonmedia Co vs. Haitai Confectionery Foods
Performance |
| Timeline |
| Kaonmedia |
| Haitai Confectionery |
Kaonmedia and Haitai Confectionery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaonmedia and Haitai Confectionery
The main advantage of trading using opposite Kaonmedia and Haitai Confectionery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaonmedia position performs unexpectedly, Haitai Confectionery 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 Haitai Confectionery will offset losses from the drop in Haitai Confectionery's long position.| Kaonmedia vs. Shinsegae Food | Kaonmedia vs. BGF Retail Co | Kaonmedia vs. Mgame Corp | Kaonmedia vs. Netmarble Games Corp |
| Haitai Confectionery vs. Samsung Electronics Co | Haitai Confectionery vs. Samsung Electronics Co | Haitai Confectionery vs. SK Hynix | Haitai Confectionery vs. POSCO Holdings |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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