Correlation Between Haitai Confectionery and Shinsegae Food
Can any of the company-specific risk be diversified away by investing in both Haitai Confectionery and Shinsegae Food 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 Shinsegae Food 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 Shinsegae Food, you can compare the effects of market volatilities on Haitai Confectionery and Shinsegae Food 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 Shinsegae Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haitai Confectionery and Shinsegae Food.
Diversification Opportunities for Haitai Confectionery and Shinsegae Food
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Haitai and Shinsegae is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Haitai Confectionery Foods and Shinsegae Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Food 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 Shinsegae Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Food has no effect on the direction of Haitai Confectionery i.e., Haitai Confectionery and Shinsegae Food go up and down completely randomly.
Pair Corralation between Haitai Confectionery and Shinsegae Food
Assuming the 90 days trading horizon Haitai Confectionery Foods is expected to generate 0.35 times more return on investment than Shinsegae Food. However, Haitai Confectionery Foods is 2.9 times less risky than Shinsegae Food. It trades about -0.31 of its potential returns per unit of risk. Shinsegae Food is currently generating about -0.14 per unit of risk. If you would invest 612,000 in Haitai Confectionery Foods on November 6, 2024 and sell it today you would lose (29,000) from holding Haitai Confectionery Foods or give up 4.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haitai Confectionery Foods vs. Shinsegae Food
Performance |
| Timeline |
| Haitai Confectionery |
| Shinsegae Food |
Haitai Confectionery and Shinsegae Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haitai Confectionery and Shinsegae Food
The main advantage of trading using opposite Haitai Confectionery and Shinsegae Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haitai Confectionery position performs unexpectedly, Shinsegae Food 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 Shinsegae Food will offset losses from the drop in Shinsegae Food's long position.| Haitai Confectionery vs. SEOWONINTECHCoLtd | Haitai Confectionery vs. KMH Hitech Co | Haitai Confectionery vs. Dongwoon Anatech Co | Haitai Confectionery vs. Mirai Semiconductors Co |
| Shinsegae Food vs. Daejoo Electronic Materials | Shinsegae Food vs. Jahwa Electronics Co | Shinsegae Food vs. UJU Electronics Co | Shinsegae Food vs. Lotte Chilsung Beverage |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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