Correlation Between Haitai Confectionery and WooDeumGee Farm
Can any of the company-specific risk be diversified away by investing in both Haitai Confectionery and WooDeumGee Farm 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 WooDeumGee Farm 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 WooDeumGee Farm Co,, you can compare the effects of market volatilities on Haitai Confectionery and WooDeumGee Farm 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 WooDeumGee Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haitai Confectionery and WooDeumGee Farm.
Diversification Opportunities for Haitai Confectionery and WooDeumGee Farm
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Haitai and WooDeumGee is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Haitai Confectionery Foods and WooDeumGee Farm Co, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WooDeumGee Farm Co, 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 WooDeumGee Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WooDeumGee Farm Co, has no effect on the direction of Haitai Confectionery i.e., Haitai Confectionery and WooDeumGee Farm go up and down completely randomly.
Pair Corralation between Haitai Confectionery and WooDeumGee Farm
Assuming the 90 days trading horizon Haitai Confectionery Foods is expected to generate 0.56 times more return on investment than WooDeumGee Farm. However, Haitai Confectionery Foods is 1.8 times less risky than WooDeumGee Farm. It trades about 0.01 of its potential returns per unit of risk. WooDeumGee Farm Co, is currently generating about -0.03 per unit of risk. If you would invest 599,200 in Haitai Confectionery Foods on November 27, 2024 and sell it today you would earn a total of 14,800 from holding Haitai Confectionery Foods or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 71.82% |
| Values | Daily Returns |
Haitai Confectionery Foods vs. WooDeumGee Farm Co,
Performance |
| Timeline |
| Haitai Confectionery |
| WooDeumGee Farm Co, |
Haitai Confectionery and WooDeumGee Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haitai Confectionery and WooDeumGee Farm
The main advantage of trading using opposite Haitai Confectionery and WooDeumGee Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haitai Confectionery position performs unexpectedly, WooDeumGee Farm 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 WooDeumGee Farm will offset losses from the drop in WooDeumGee Farm's long position.The idea behind Haitai Confectionery Foods and WooDeumGee Farm Co, pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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