Correlation Between Haitai Confectionery and KMH Hitech
Can any of the company-specific risk be diversified away by investing in both Haitai Confectionery and KMH Hitech 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 KMH Hitech 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 KMH Hitech Co, you can compare the effects of market volatilities on Haitai Confectionery and KMH Hitech 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 KMH Hitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haitai Confectionery and KMH Hitech.
Diversification Opportunities for Haitai Confectionery and KMH Hitech
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Haitai and KMH is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Haitai Confectionery Foods and KMH Hitech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KMH Hitech 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 KMH Hitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KMH Hitech has no effect on the direction of Haitai Confectionery i.e., Haitai Confectionery and KMH Hitech go up and down completely randomly.
Pair Corralation between Haitai Confectionery and KMH Hitech
Assuming the 90 days trading horizon Haitai Confectionery Foods is expected to generate 1.08 times more return on investment than KMH Hitech. However, Haitai Confectionery is 1.08 times more volatile than KMH Hitech Co. It trades about 0.05 of its potential returns per unit of risk. KMH Hitech Co is currently generating about -0.04 per unit of risk. If you would invest 564,551 in Haitai Confectionery Foods on October 17, 2024 and sell it today you would earn a total of 30,449 from holding Haitai Confectionery Foods or generate 5.39% 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. KMH Hitech Co
Performance |
| Timeline |
| Haitai Confectionery |
| KMH Hitech |
Haitai Confectionery and KMH Hitech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haitai Confectionery and KMH Hitech
The main advantage of trading using opposite Haitai Confectionery and KMH Hitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haitai Confectionery position performs unexpectedly, KMH Hitech 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 KMH Hitech will offset losses from the drop in KMH Hitech's long position.| Haitai Confectionery vs. DB Insurance Co | Haitai Confectionery vs. Korea Information Communications | Haitai Confectionery vs. InfoBank | Haitai Confectionery vs. Ssangyong Information Communication |
| KMH Hitech vs. Korea Information Engineering | KMH Hitech vs. System and Application | KMH Hitech vs. KB Financial Group | KMH Hitech vs. Pureun Mutual Savings |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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