Correlation Between Haitai Confectionery and Taegu Broadcasting
Can any of the company-specific risk be diversified away by investing in both Haitai Confectionery and Taegu Broadcasting 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 Taegu Broadcasting 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 Taegu Broadcasting, you can compare the effects of market volatilities on Haitai Confectionery and Taegu Broadcasting 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 Taegu Broadcasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haitai Confectionery and Taegu Broadcasting.
Diversification Opportunities for Haitai Confectionery and Taegu Broadcasting
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Haitai and Taegu is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Haitai Confectionery Foods and Taegu Broadcasting in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taegu Broadcasting 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 Taegu Broadcasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taegu Broadcasting has no effect on the direction of Haitai Confectionery i.e., Haitai Confectionery and Taegu Broadcasting go up and down completely randomly.
Pair Corralation between Haitai Confectionery and Taegu Broadcasting
Assuming the 90 days trading horizon Haitai Confectionery Foods is expected to generate 1.47 times more return on investment than Taegu Broadcasting. However, Haitai Confectionery is 1.47 times more volatile than Taegu Broadcasting. It trades about 0.0 of its potential returns per unit of risk. Taegu Broadcasting is currently generating about -0.02 per unit of risk. If you would invest 654,266 in Haitai Confectionery Foods on October 27, 2024 and sell it today you would lose (75,266) from holding Haitai Confectionery Foods or give up 11.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haitai Confectionery Foods vs. Taegu Broadcasting
Performance |
| Timeline |
| Haitai Confectionery |
| Taegu Broadcasting |
Haitai Confectionery and Taegu Broadcasting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haitai Confectionery and Taegu Broadcasting
The main advantage of trading using opposite Haitai Confectionery and Taegu Broadcasting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haitai Confectionery position performs unexpectedly, Taegu Broadcasting 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 Taegu Broadcasting will offset losses from the drop in Taegu Broadcasting's long position.| Haitai Confectionery vs. LG Household Healthcare | Haitai Confectionery vs. Sangsin Energy Display | Haitai Confectionery vs. Formetal Co | Haitai Confectionery vs. Nable Communications |
| Taegu Broadcasting vs. Bookook Steel | Taegu Broadcasting vs. Seah Steel Corp | Taegu Broadcasting vs. Wonil Special Steel | Taegu Broadcasting vs. Homecast CoLtd |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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