Correlation Between Haitai Confectionery and Korea Shipbuilding
Can any of the company-specific risk be diversified away by investing in both Haitai Confectionery and Korea Shipbuilding 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 Korea Shipbuilding 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 Korea Shipbuilding Offshore, you can compare the effects of market volatilities on Haitai Confectionery and Korea Shipbuilding 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 Korea Shipbuilding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haitai Confectionery and Korea Shipbuilding.
Diversification Opportunities for Haitai Confectionery and Korea Shipbuilding
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Haitai and Korea is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Haitai Confectionery Foods and Korea Shipbuilding Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Shipbuilding 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 Korea Shipbuilding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Shipbuilding has no effect on the direction of Haitai Confectionery i.e., Haitai Confectionery and Korea Shipbuilding go up and down completely randomly.
Pair Corralation between Haitai Confectionery and Korea Shipbuilding
Assuming the 90 days trading horizon Haitai Confectionery is expected to generate 2.77 times less return on investment than Korea Shipbuilding. But when comparing it to its historical volatility, Haitai Confectionery Foods is 1.34 times less risky than Korea Shipbuilding. It trades about 0.11 of its potential returns per unit of risk. Korea Shipbuilding Offshore is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 19,050,000 in Korea Shipbuilding Offshore on August 29, 2024 and sell it today you would earn a total of 2,550,000 from holding Korea Shipbuilding Offshore or generate 13.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haitai Confectionery Foods vs. Korea Shipbuilding Offshore
Performance |
| Timeline |
| Haitai Confectionery |
| Korea Shipbuilding |
Haitai Confectionery and Korea Shipbuilding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haitai Confectionery and Korea Shipbuilding
The main advantage of trading using opposite Haitai Confectionery and Korea Shipbuilding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haitai Confectionery position performs unexpectedly, Korea Shipbuilding 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 Korea Shipbuilding will offset losses from the drop in Korea Shipbuilding's long position.| Haitai Confectionery vs. AptaBio Therapeutics | Haitai Confectionery vs. Daewoo SBI SPAC | Haitai Confectionery vs. Dream Security co | Haitai Confectionery vs. Microfriend |
| Korea Shipbuilding vs. Samsung Electronics Co | Korea Shipbuilding vs. Samsung Electronics Co | Korea Shipbuilding vs. Hyundai Motor Co | Korea Shipbuilding vs. Hyundai Motor |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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