Correlation Between Haesung DS and Finetechnix CoLtd
Can any of the company-specific risk be diversified away by investing in both Haesung DS and Finetechnix CoLtd 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 Haesung DS and Finetechnix CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haesung DS Co and Finetechnix CoLtd, you can compare the effects of market volatilities on Haesung DS and Finetechnix CoLtd 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 Haesung DS with a short position of Finetechnix CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haesung DS and Finetechnix CoLtd.
Diversification Opportunities for Haesung DS and Finetechnix CoLtd
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Haesung and Finetechnix is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Haesung DS Co and Finetechnix CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finetechnix CoLtd and Haesung DS 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 Haesung DS Co are associated (or correlated) with Finetechnix CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finetechnix CoLtd has no effect on the direction of Haesung DS i.e., Haesung DS and Finetechnix CoLtd go up and down completely randomly.
Pair Corralation between Haesung DS and Finetechnix CoLtd
Assuming the 90 days trading horizon Haesung DS Co is expected to generate 1.17 times more return on investment than Finetechnix CoLtd. However, Haesung DS is 1.17 times more volatile than Finetechnix CoLtd. It trades about -0.03 of its potential returns per unit of risk. Finetechnix CoLtd is currently generating about -0.07 per unit of risk. If you would invest 4,114,201 in Haesung DS Co on September 3, 2024 and sell it today you would lose (1,949,201) from holding Haesung DS Co or give up 47.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haesung DS Co vs. Finetechnix CoLtd
Performance |
| Timeline |
| Haesung DS |
| Finetechnix CoLtd |
Haesung DS and Finetechnix CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haesung DS and Finetechnix CoLtd
The main advantage of trading using opposite Haesung DS and Finetechnix CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haesung DS position performs unexpectedly, Finetechnix CoLtd 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 Finetechnix CoLtd will offset losses from the drop in Finetechnix CoLtd's long position.| Haesung DS vs. Dongsin Engineering Construction | Haesung DS vs. Doosan Fuel Cell | Haesung DS vs. Daishin Balance 1 | Haesung DS vs. Total Soft Bank |
| Finetechnix CoLtd vs. TOPMATERIAL LTD | Finetechnix CoLtd vs. Union Materials Corp | Finetechnix CoLtd vs. Miwon Chemicals Co | Finetechnix CoLtd vs. SK Chemicals 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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