Correlation Between Haitai Confectionery and Cloud Air
Can any of the company-specific risk be diversified away by investing in both Haitai Confectionery and Cloud Air 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 Cloud Air 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 Cloud Air CoLtd, you can compare the effects of market volatilities on Haitai Confectionery and Cloud Air 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 Cloud Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haitai Confectionery and Cloud Air.
Diversification Opportunities for Haitai Confectionery and Cloud Air
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Haitai and Cloud is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Haitai Confectionery Foods and Cloud Air CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cloud Air CoLtd 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 Cloud Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cloud Air CoLtd has no effect on the direction of Haitai Confectionery i.e., Haitai Confectionery and Cloud Air go up and down completely randomly.
Pair Corralation between Haitai Confectionery and Cloud Air
Assuming the 90 days trading horizon Haitai Confectionery Foods is expected to generate 1.24 times more return on investment than Cloud Air. However, Haitai Confectionery is 1.24 times more volatile than Cloud Air CoLtd. It trades about 0.06 of its potential returns per unit of risk. Cloud Air CoLtd is currently generating about -0.04 per unit of risk. If you would invest 581,000 in Haitai Confectionery Foods on September 12, 2024 and sell it today you would earn a total of 16,000 from holding Haitai Confectionery Foods or generate 2.75% 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. Cloud Air CoLtd
Performance |
| Timeline |
| Haitai Confectionery |
| Cloud Air CoLtd |
Haitai Confectionery and Cloud Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haitai Confectionery and Cloud Air
The main advantage of trading using opposite Haitai Confectionery and Cloud Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haitai Confectionery position performs unexpectedly, Cloud Air 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 Cloud Air will offset losses from the drop in Cloud Air's long position.| Haitai Confectionery vs. Samsung Electronics Co | Haitai Confectionery vs. Samsung Electronics Co | Haitai Confectionery vs. SK Hynix | Haitai Confectionery vs. POSCO Holdings |
| Cloud Air vs. SK Hynix | Cloud Air vs. People Technology | Cloud Air vs. Hana Materials | Cloud Air vs. SIMMTECH Co |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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