Correlation Between Haitai Confectionery and Daelim Industrial
Can any of the company-specific risk be diversified away by investing in both Haitai Confectionery and Daelim Industrial 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 Haitai Confectionery and Daelim Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haitai Confectionery Foods and Daelim Industrial Co, you can compare the effects of market volatilities on Haitai Confectionery and Daelim Industrial 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 Haitai Confectionery with a short position of Daelim Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haitai Confectionery and Daelim Industrial.
Diversification Opportunities for Haitai Confectionery and Daelim Industrial
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Haitai and Daelim is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Haitai Confectionery Foods and Daelim Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daelim Industrial and Haitai Confectionery 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 Haitai Confectionery Foods are associated (or correlated) with Daelim Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daelim Industrial has no effect on the direction of Haitai Confectionery i.e., Haitai Confectionery and Daelim Industrial go up and down completely randomly.
Pair Corralation between Haitai Confectionery and Daelim Industrial
Assuming the 90 days trading horizon Haitai Confectionery Foods is expected to generate 1.35 times more return on investment than Daelim Industrial. However, Haitai Confectionery is 1.35 times more volatile than Daelim Industrial Co. It trades about 0.01 of its potential returns per unit of risk. Daelim Industrial Co is currently generating about 0.01 per unit of risk. If you would invest 572,517 in Haitai Confectionery Foods on September 12, 2024 and sell it today you would earn a total of 2,483 from holding Haitai Confectionery Foods or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haitai Confectionery Foods vs. Daelim Industrial Co
Performance |
| Timeline |
| Haitai Confectionery |
| Daelim Industrial |
Haitai Confectionery and Daelim Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haitai Confectionery and Daelim Industrial
The main advantage of trading using opposite Haitai Confectionery and Daelim Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haitai Confectionery position performs unexpectedly, Daelim Industrial 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 Daelim Industrial will offset losses from the drop in Daelim Industrial's long position.| Haitai Confectionery vs. Samsung Electronics Co | Haitai Confectionery vs. Samsung Electronics Co | Haitai Confectionery vs. SK Hynix | Haitai Confectionery vs. POSCO Holdings |
| Daelim Industrial vs. Haitai Confectionery Foods | Daelim Industrial vs. Samlip General Foods | Daelim Industrial vs. Seoul Food Industrial | Daelim Industrial vs. KT Submarine Telecom |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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