Correlation Between Haitai Confectionery and LG Electronics
Can any of the company-specific risk be diversified away by investing in both Haitai Confectionery and LG 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 LG 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 LG Electronics, you can compare the effects of market volatilities on Haitai Confectionery and LG 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 LG Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haitai Confectionery and LG Electronics.
Diversification Opportunities for Haitai Confectionery and LG Electronics
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Haitai and 066570 is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Haitai Confectionery Foods and LG Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG 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 LG Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Electronics has no effect on the direction of Haitai Confectionery i.e., Haitai Confectionery and LG Electronics go up and down completely randomly.
Pair Corralation between Haitai Confectionery and LG Electronics
Assuming the 90 days trading horizon Haitai Confectionery Foods is expected to generate 0.69 times more return on investment than LG Electronics. However, Haitai Confectionery Foods is 1.45 times less risky than LG Electronics. It trades about 0.14 of its potential returns per unit of risk. LG Electronics is currently generating about -0.14 per unit of risk. If you would invest 583,000 in Haitai Confectionery Foods on December 1, 2024 and sell it today you would earn a total of 23,000 from holding Haitai Confectionery Foods or generate 3.95% 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. LG Electronics
Performance |
| Timeline |
| Haitai Confectionery |
| LG Electronics |
Haitai Confectionery and LG Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haitai Confectionery and LG Electronics
The main advantage of trading using opposite Haitai Confectionery and LG Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haitai Confectionery position performs unexpectedly, LG 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 LG Electronics will offset losses from the drop in LG Electronics' long position.| Haitai Confectionery vs. AptaBio Therapeutics | Haitai Confectionery vs. Daewoo SBI SPAC | Haitai Confectionery vs. Dream Security co | Haitai Confectionery vs. Microfriend |
| LG Electronics vs. Alton Sports CoLtd | LG Electronics vs. Hanwha Life Insurance | LG Electronics vs. LG Household Healthcare | LG Electronics vs. DB Insurance 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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