Correlation Between Haitai Confectionery and ABCO Electronics
Can any of the company-specific risk be diversified away by investing in both Haitai Confectionery and ABCO Electronics 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 ABCO Electronics 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 ABCO Electronics Co, you can compare the effects of market volatilities on Haitai Confectionery and ABCO Electronics 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 ABCO Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haitai Confectionery and ABCO Electronics.
Diversification Opportunities for Haitai Confectionery and ABCO Electronics
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Haitai and ABCO is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Haitai Confectionery Foods and ABCO Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABCO Electronics 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 ABCO Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABCO Electronics has no effect on the direction of Haitai Confectionery i.e., Haitai Confectionery and ABCO Electronics go up and down completely randomly.
Pair Corralation between Haitai Confectionery and ABCO Electronics
Assuming the 90 days trading horizon Haitai Confectionery Foods is expected to generate 0.94 times more return on investment than ABCO Electronics. However, Haitai Confectionery Foods is 1.07 times less risky than ABCO Electronics. It trades about 0.17 of its potential returns per unit of risk. ABCO Electronics Co is currently generating about 0.05 per unit of risk. If you would invest 559,000 in Haitai Confectionery Foods on September 18, 2024 and sell it today you would earn a total of 53,000 from holding Haitai Confectionery Foods or generate 9.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haitai Confectionery Foods vs. ABCO Electronics Co
Performance |
| Timeline |
| Haitai Confectionery |
| ABCO Electronics |
Haitai Confectionery and ABCO Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haitai Confectionery and ABCO Electronics
The main advantage of trading using opposite Haitai Confectionery and ABCO Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haitai Confectionery position performs unexpectedly, ABCO Electronics 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 ABCO Electronics will offset losses from the drop in ABCO Electronics' long position.| Haitai Confectionery vs. Samsung Electronics Co | Haitai Confectionery vs. Samsung Electronics Co | Haitai Confectionery vs. SK Hynix | Haitai Confectionery vs. POSCO Holdings |
| ABCO Electronics vs. Cube Entertainment | ABCO Electronics vs. Dreamus Company | ABCO Electronics vs. LG Energy Solution | ABCO Electronics vs. Dongwon System |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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