Correlation Between Haitai Confectionery and Haesung Industrial
Can any of the company-specific risk be diversified away by investing in both Haitai Confectionery and Haesung Industrial 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 Haesung Industrial 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 Haesung Industrial Co, you can compare the effects of market volatilities on Haitai Confectionery and Haesung Industrial 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 Haesung Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haitai Confectionery and Haesung Industrial.
Diversification Opportunities for Haitai Confectionery and Haesung Industrial
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Haitai and Haesung is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Haitai Confectionery Foods and Haesung Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haesung Industrial 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 Haesung Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haesung Industrial has no effect on the direction of Haitai Confectionery i.e., Haitai Confectionery and Haesung Industrial go up and down completely randomly.
Pair Corralation between Haitai Confectionery and Haesung Industrial
Assuming the 90 days trading horizon Haitai Confectionery Foods is expected to generate 1.08 times more return on investment than Haesung Industrial. However, Haitai Confectionery is 1.08 times more volatile than Haesung Industrial Co. It trades about 0.03 of its potential returns per unit of risk. Haesung Industrial Co is currently generating about -0.09 per unit of risk. If you would invest 578,000 in Haitai Confectionery Foods on August 31, 2024 and sell it today you would earn a total of 11,000 from holding Haitai Confectionery Foods or generate 1.9% 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. Haesung Industrial Co
Performance |
| Timeline |
| Haitai Confectionery |
| Haesung Industrial |
Haitai Confectionery and Haesung Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haitai Confectionery and Haesung Industrial
The main advantage of trading using opposite Haitai Confectionery and Haesung Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haitai Confectionery position performs unexpectedly, Haesung Industrial 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 Haesung Industrial will offset losses from the drop in Haesung Industrial's long position.| Haitai Confectionery vs. SEOJEON ELECTRIC MACHINERY | Haitai Confectionery vs. Youngchang Chemical Co | Haitai Confectionery vs. Woorim Machinery Co | Haitai Confectionery vs. SH Energy Chemical |
| Haesung Industrial vs. Busan Industrial Co | Haesung Industrial vs. Busan Ind | Haesung Industrial vs. Mirae Asset Daewoo | Haesung Industrial vs. Finebesteel |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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