Correlation Between Haitai Confectionery and SEOJEON ELECTRIC
Can any of the company-specific risk be diversified away by investing in both Haitai Confectionery and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC 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 SEOJEON ELECTRIC MACHINERY, you can compare the effects of market volatilities on Haitai Confectionery and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haitai Confectionery and SEOJEON ELECTRIC.
Diversification Opportunities for Haitai Confectionery and SEOJEON ELECTRIC
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Haitai and SEOJEON is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Haitai Confectionery Foods and SEOJEON ELECTRIC MACHINERY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEOJEON ELECTRIC MAC 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 SEOJEON ELECTRIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEOJEON ELECTRIC MAC has no effect on the direction of Haitai Confectionery i.e., Haitai Confectionery and SEOJEON ELECTRIC go up and down completely randomly.
Pair Corralation between Haitai Confectionery and SEOJEON ELECTRIC
Assuming the 90 days trading horizon Haitai Confectionery Foods is expected to generate 0.68 times more return on investment than SEOJEON ELECTRIC. However, Haitai Confectionery Foods is 1.48 times less risky than SEOJEON ELECTRIC. It trades about 0.03 of its potential returns per unit of risk. SEOJEON ELECTRIC MACHINERY is currently generating about 0.02 per unit of risk. If you would invest 497,338 in Haitai Confectionery Foods on September 1, 2024 and sell it today you would earn a total of 73,662 from holding Haitai Confectionery Foods or generate 14.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haitai Confectionery Foods vs. SEOJEON ELECTRIC MACHINERY
Performance |
| Timeline |
| Haitai Confectionery |
| SEOJEON ELECTRIC MAC |
Haitai Confectionery and SEOJEON ELECTRIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haitai Confectionery and SEOJEON ELECTRIC
The main advantage of trading using opposite Haitai Confectionery and SEOJEON ELECTRIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haitai Confectionery position performs unexpectedly, SEOJEON ELECTRIC 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 SEOJEON ELECTRIC will offset losses from the drop in SEOJEON ELECTRIC's long position.| Haitai Confectionery vs. Nice Information Telecommunication | Haitai Confectionery vs. LG Display Co | Haitai Confectionery vs. Nable Communications | Haitai Confectionery vs. Shinsegae Food |
| SEOJEON ELECTRIC vs. Dongil Technology | SEOJEON ELECTRIC vs. Lotte Energy Materials | SEOJEON ELECTRIC vs. PI Advanced Materials | SEOJEON ELECTRIC vs. Daou Technology |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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