Correlation Between Microfriend and Haitai Confectionery
Can any of the company-specific risk be diversified away by investing in both Microfriend and Haitai Confectionery 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 Microfriend and Haitai Confectionery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microfriend and Haitai Confectionery Foods, you can compare the effects of market volatilities on Microfriend and Haitai Confectionery 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 Microfriend with a short position of Haitai Confectionery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microfriend and Haitai Confectionery.
Diversification Opportunities for Microfriend and Haitai Confectionery
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Microfriend and Haitai is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Microfriend and Haitai Confectionery Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haitai Confectionery and Microfriend 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 Microfriend are associated (or correlated) with Haitai Confectionery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haitai Confectionery has no effect on the direction of Microfriend i.e., Microfriend and Haitai Confectionery go up and down completely randomly.
Pair Corralation between Microfriend and Haitai Confectionery
Assuming the 90 days trading horizon Microfriend is expected to under-perform the Haitai Confectionery. In addition to that, Microfriend is 2.18 times more volatile than Haitai Confectionery Foods. It trades about -0.23 of its total potential returns per unit of risk. Haitai Confectionery Foods is currently generating about 0.11 per unit of volatility. If you would invest 580,000 in Haitai Confectionery Foods on August 29, 2024 and sell it today you would earn a total of 26,000 from holding Haitai Confectionery Foods or generate 4.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microfriend vs. Haitai Confectionery Foods
Performance |
| Timeline |
| Microfriend |
| Haitai Confectionery |
Microfriend and Haitai Confectionery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microfriend and Haitai Confectionery
The main advantage of trading using opposite Microfriend and Haitai Confectionery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microfriend position performs unexpectedly, Haitai Confectionery 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 Haitai Confectionery will offset losses from the drop in Haitai Confectionery's long position.| Microfriend vs. SK Hynix | Microfriend vs. People Technology | Microfriend vs. SIMMTECH Co | Microfriend vs. Haesung DS Co |
| Haitai Confectionery vs. AptaBio Therapeutics | Haitai Confectionery vs. Daewoo SBI SPAC | Haitai Confectionery vs. Dream Security co | Haitai Confectionery vs. Microfriend |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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