Correlation Between Haitai Confectionery and Dongil Steel
Can any of the company-specific risk be diversified away by investing in both Haitai Confectionery and Dongil Steel 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 Dongil Steel 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 Dongil Steel Co, you can compare the effects of market volatilities on Haitai Confectionery and Dongil Steel 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 Dongil Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haitai Confectionery and Dongil Steel.
Diversification Opportunities for Haitai Confectionery and Dongil Steel
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Haitai and Dongil is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Haitai Confectionery Foods and Dongil Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil Steel 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 Dongil Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongil Steel has no effect on the direction of Haitai Confectionery i.e., Haitai Confectionery and Dongil Steel go up and down completely randomly.
Pair Corralation between Haitai Confectionery and Dongil Steel
Assuming the 90 days trading horizon Haitai Confectionery is expected to generate 4.29 times less return on investment than Dongil Steel. In addition to that, Haitai Confectionery is 1.99 times more volatile than Dongil Steel Co. It trades about 0.01 of its total potential returns per unit of risk. Dongil Steel Co is currently generating about 0.11 per unit of volatility. If you would invest 93,900 in Dongil Steel Co on September 3, 2024 and sell it today you would earn a total of 24,800 from holding Dongil Steel Co or generate 26.41% 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. Dongil Steel Co
Performance |
| Timeline |
| Haitai Confectionery |
| Dongil Steel |
Haitai Confectionery and Dongil Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haitai Confectionery and Dongil Steel
The main advantage of trading using opposite Haitai Confectionery and Dongil Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haitai Confectionery position performs unexpectedly, Dongil Steel 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 Dongil Steel will offset losses from the drop in Dongil Steel's long position.| Haitai Confectionery vs. AptaBio Therapeutics | Haitai Confectionery vs. Daewoo SBI SPAC | Haitai Confectionery vs. Dream Security co | Haitai Confectionery vs. Microfriend |
| Dongil Steel vs. Korean Reinsurance Co | Dongil Steel vs. Dongbang Ship Machinery | Dongil Steel vs. Haitai Confectionery Foods | Dongil Steel vs. Seoam Machinery Industry |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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