Correlation Between ENERGYMACHINERY KOREA and HB Technology
Can any of the company-specific risk be diversified away by investing in both ENERGYMACHINERY KOREA and HB Technology 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 ENERGYMACHINERY KOREA and HB Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENERGYMACHINERY KOREA CoLtd and HB Technology TD, you can compare the effects of market volatilities on ENERGYMACHINERY KOREA and HB Technology 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 ENERGYMACHINERY KOREA with a short position of HB Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENERGYMACHINERY KOREA and HB Technology.
Diversification Opportunities for ENERGYMACHINERY KOREA and HB Technology
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ENERGYMACHINERY and 078150 is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding ENERGYMACHINERY KOREA CoLtd and HB Technology TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HB Technology TD and ENERGYMACHINERY KOREA 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 ENERGYMACHINERY KOREA CoLtd are associated (or correlated) with HB Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HB Technology TD has no effect on the direction of ENERGYMACHINERY KOREA i.e., ENERGYMACHINERY KOREA and HB Technology go up and down completely randomly.
Pair Corralation between ENERGYMACHINERY KOREA and HB Technology
Assuming the 90 days trading horizon ENERGYMACHINERY KOREA is expected to generate 27.09 times less return on investment than HB Technology. But when comparing it to its historical volatility, ENERGYMACHINERY KOREA CoLtd is 2.21 times less risky than HB Technology. It trades about 0.04 of its potential returns per unit of risk. HB Technology TD is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 196,400 in HB Technology TD on October 25, 2024 and sell it today you would earn a total of 64,100 from holding HB Technology TD or generate 32.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENERGYMACHINERY KOREA CoLtd vs. HB Technology TD
Performance |
| Timeline |
| ENERGYMACHINERY KOREA |
| HB Technology TD |
ENERGYMACHINERY KOREA and HB Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENERGYMACHINERY KOREA and HB Technology
The main advantage of trading using opposite ENERGYMACHINERY KOREA and HB Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENERGYMACHINERY KOREA position performs unexpectedly, HB Technology 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 HB Technology will offset losses from the drop in HB Technology's long position.| ENERGYMACHINERY KOREA vs. Korea Computer | ENERGYMACHINERY KOREA vs. SK Chemicals Co | ENERGYMACHINERY KOREA vs. FNSTech Co | ENERGYMACHINERY KOREA vs. Inzi Display CoLtd |
| HB Technology vs. ENERGYMACHINERY KOREA CoLtd | HB Technology vs. Ilji Technology Co | HB Technology vs. Eugene Technology CoLtd | HB Technology vs. Sungdo Engineering Construction |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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