Correlation Between Haitai Confectionery and Woori Technology
Can any of the company-specific risk be diversified away by investing in both Haitai Confectionery and Woori Technology 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 Woori Technology 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 Woori Technology Investment, you can compare the effects of market volatilities on Haitai Confectionery and Woori Technology 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 Woori Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haitai Confectionery and Woori Technology.
Diversification Opportunities for Haitai Confectionery and Woori Technology
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Haitai and Woori is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Haitai Confectionery Foods and Woori Technology Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Technology Inv 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 Woori Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woori Technology Inv has no effect on the direction of Haitai Confectionery i.e., Haitai Confectionery and Woori Technology go up and down completely randomly.
Pair Corralation between Haitai Confectionery and Woori Technology
Assuming the 90 days trading horizon Haitai Confectionery Foods is expected to generate 0.68 times more return on investment than Woori Technology. However, Haitai Confectionery Foods is 1.48 times less risky than Woori Technology. It trades about 0.24 of its potential returns per unit of risk. Woori Technology Investment is currently generating about -0.12 per unit of risk. If you would invest 550,994 in Haitai Confectionery Foods on October 7, 2024 and sell it today you would earn a total of 61,006 from holding Haitai Confectionery Foods or generate 11.07% 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. Woori Technology Investment
Performance |
| Timeline |
| Haitai Confectionery |
| Woori Technology Inv |
Haitai Confectionery and Woori Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haitai Confectionery and Woori Technology
The main advantage of trading using opposite Haitai Confectionery and Woori Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haitai Confectionery position performs unexpectedly, Woori Technology 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 Woori Technology will offset losses from the drop in Woori Technology's long position.| Haitai Confectionery vs. TOPMATERIAL LTD | Haitai Confectionery vs. Songwon Industrial Co | Haitai Confectionery vs. Eagon Industrial Co | Haitai Confectionery vs. Hwasung Industrial Co |
| Woori Technology vs. Humasis Co | Woori Technology vs. JUSUNG ENGINEERING Co | Woori Technology vs. Winix Inc | Woori Technology vs. AfreecaTV 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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