Correlation Between Haitai Confectionery and Korea Electric
Can any of the company-specific risk be diversified away by investing in both Haitai Confectionery and Korea Electric 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 Electric 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 Electric Power, you can compare the effects of market volatilities on Haitai Confectionery and Korea Electric 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 Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haitai Confectionery and Korea Electric.
Diversification Opportunities for Haitai Confectionery and Korea Electric
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Haitai and Korea is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Haitai Confectionery Foods and Korea Electric Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Electric Power 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 Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Electric Power has no effect on the direction of Haitai Confectionery i.e., Haitai Confectionery and Korea Electric go up and down completely randomly.
Pair Corralation between Haitai Confectionery and Korea Electric
Assuming the 90 days trading horizon Haitai Confectionery Foods is expected to generate 1.21 times more return on investment than Korea Electric. However, Haitai Confectionery is 1.21 times more volatile than Korea Electric Power. It trades about 0.01 of its potential returns per unit of risk. Korea Electric Power is currently generating about 0.01 per unit of risk. If you would invest 623,715 in Haitai Confectionery Foods on September 13, 2024 and sell it today you would lose (26,715) from holding Haitai Confectionery Foods or give up 4.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haitai Confectionery Foods vs. Korea Electric Power
Performance |
| Timeline |
| Haitai Confectionery |
| Korea Electric Power |
Haitai Confectionery and Korea Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haitai Confectionery and Korea Electric
The main advantage of trading using opposite Haitai Confectionery and Korea Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haitai Confectionery position performs unexpectedly, Korea Electric 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 Electric will offset losses from the drop in Korea Electric'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 |
| Korea Electric vs. Samyang Foods Co | Korea Electric vs. Haitai Confectionery Foods | Korea Electric vs. Automobile Pc | Korea Electric vs. CKH Food Health |
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 CEOs Directory module to screen CEOs from public companies around the world.
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