Correlation Between KM and Haitai Confectionery
Can any of the company-specific risk be diversified away by investing in both KM 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 KM and Haitai Confectionery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KM Corporation and Haitai Confectionery Foods, you can compare the effects of market volatilities on KM 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 KM with a short position of Haitai Confectionery. Check out your portfolio center. Please also check ongoing floating volatility patterns of KM and Haitai Confectionery.
Diversification Opportunities for KM and Haitai Confectionery
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KM and Haitai is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding KM Corp. and Haitai Confectionery Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haitai Confectionery and KM 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 KM Corporation 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 KM i.e., KM and Haitai Confectionery go up and down completely randomly.
Pair Corralation between KM and Haitai Confectionery
Assuming the 90 days trading horizon KM Corporation is expected to under-perform the Haitai Confectionery. In addition to that, KM is 1.08 times more volatile than Haitai Confectionery Foods. It trades about -0.02 of its total potential returns per unit of risk. Haitai Confectionery Foods is currently generating about 0.03 per unit of volatility. If you would invest 528,722 in Haitai Confectionery Foods on November 3, 2024 and sell it today you would earn a total of 54,278 from holding Haitai Confectionery Foods or generate 10.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.58% |
| Values | Daily Returns |
KM Corp. vs. Haitai Confectionery Foods
Performance |
| Timeline |
| KM Corporation |
| Haitai Confectionery |
KM and Haitai Confectionery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KM and Haitai Confectionery
The main advantage of trading using opposite KM and Haitai Confectionery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KM 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.| KM vs. SM Entertainment Co | KM vs. Kaonmedia Co | KM vs. Korea Information Communications | KM vs. YG Entertainment |
| Haitai Confectionery vs. TK Chemical | Haitai Confectionery vs. Samlip General Foods | Haitai Confectionery vs. Seoul Food Industrial | Haitai Confectionery vs. Tae Kyung Chemical |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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