Correlation Between Haitai Confectionery and Shin Steel
Can any of the company-specific risk be diversified away by investing in both Haitai Confectionery and Shin Steel 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 Shin Steel 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 Shin Steel Co, you can compare the effects of market volatilities on Haitai Confectionery and Shin Steel 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 Shin Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haitai Confectionery and Shin Steel.
Diversification Opportunities for Haitai Confectionery and Shin Steel
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Haitai and Shin is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Haitai Confectionery Foods and Shin Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Steel 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 Shin Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Steel has no effect on the direction of Haitai Confectionery i.e., Haitai Confectionery and Shin Steel go up and down completely randomly.
Pair Corralation between Haitai Confectionery and Shin Steel
Assuming the 90 days trading horizon Haitai Confectionery Foods is expected to generate 0.72 times more return on investment than Shin Steel. However, Haitai Confectionery Foods is 1.38 times less risky than Shin Steel. It trades about 0.0 of its potential returns per unit of risk. Shin Steel Co is currently generating about -0.03 per unit of risk. If you would invest 578,000 in Haitai Confectionery Foods on September 2, 2024 and sell it today you would lose (7,000) from holding Haitai Confectionery Foods or give up 1.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haitai Confectionery Foods vs. Shin Steel Co
Performance |
| Timeline |
| Haitai Confectionery |
| Shin Steel |
Haitai Confectionery and Shin Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haitai Confectionery and Shin Steel
The main advantage of trading using opposite Haitai Confectionery and Shin Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haitai Confectionery position performs unexpectedly, Shin Steel 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 Shin Steel will offset losses from the drop in Shin Steel's long position.| Haitai Confectionery vs. AptaBio Therapeutics | Haitai Confectionery vs. Daewoo SBI SPAC | Haitai Confectionery vs. Dream Security co | Haitai Confectionery vs. Microfriend |
| Shin Steel vs. Sangsin Energy Display | Shin Steel vs. Inzi Display CoLtd | Shin Steel vs. KG Eco Technology | Shin Steel vs. Ilji Technology 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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