Correlation Between Haitai Confectionery and Cheryong Industrial
Can any of the company-specific risk be diversified away by investing in both Haitai Confectionery and Cheryong Industrial 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 Cheryong Industrial 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 Cheryong Industrial CoLtd, you can compare the effects of market volatilities on Haitai Confectionery and Cheryong Industrial 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 Cheryong Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haitai Confectionery and Cheryong Industrial.
Diversification Opportunities for Haitai Confectionery and Cheryong Industrial
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Haitai and Cheryong is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Haitai Confectionery Foods and Cheryong Industrial CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheryong Industrial 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 Cheryong Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheryong Industrial CoLtd has no effect on the direction of Haitai Confectionery i.e., Haitai Confectionery and Cheryong Industrial go up and down completely randomly.
Pair Corralation between Haitai Confectionery and Cheryong Industrial
Assuming the 90 days trading horizon Haitai Confectionery Foods is expected to under-perform the Cheryong Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Haitai Confectionery Foods is 5.97 times less risky than Cheryong Industrial. The stock trades about -0.23 of its potential returns per unit of risk. The Cheryong Industrial CoLtd is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 554,965 in Cheryong Industrial CoLtd on October 23, 2024 and sell it today you would earn a total of 147,035 from holding Cheryong Industrial CoLtd or generate 26.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Haitai Confectionery Foods vs. Cheryong Industrial CoLtd
Performance |
| Timeline |
| Haitai Confectionery |
| Cheryong Industrial CoLtd |
Haitai Confectionery and Cheryong Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haitai Confectionery and Cheryong Industrial
The main advantage of trading using opposite Haitai Confectionery and Cheryong Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haitai Confectionery position performs unexpectedly, Cheryong Industrial 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 Cheryong Industrial will offset losses from the drop in Cheryong Industrial's long position.| Haitai Confectionery vs. Woorim Machinery Co | Haitai Confectionery vs. SBI Investment KOREA | Haitai Confectionery vs. Mgame Corp | Haitai Confectionery vs. SV Investment |
| Cheryong Industrial vs. Kakao Games Corp | Cheryong Industrial vs. Echomarketing CoLtd | Cheryong Industrial vs. Organic Special Pet | Cheryong Industrial vs. Haitai Confectionery Foods |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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