Correlation Between Haesung DS and Microfriend
Can any of the company-specific risk be diversified away by investing in both Haesung DS and Microfriend 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 Microfriend 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 Microfriend, you can compare the effects of market volatilities on Haesung DS and Microfriend 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 Microfriend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haesung DS and Microfriend.
Diversification Opportunities for Haesung DS and Microfriend
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Haesung and Microfriend is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Haesung DS Co and Microfriend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microfriend 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 Microfriend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microfriend has no effect on the direction of Haesung DS i.e., Haesung DS and Microfriend go up and down completely randomly.
Pair Corralation between Haesung DS and Microfriend
Assuming the 90 days trading horizon Haesung DS Co is expected to generate 1.11 times more return on investment than Microfriend. However, Haesung DS is 1.11 times more volatile than Microfriend. It trades about -0.17 of its potential returns per unit of risk. Microfriend is currently generating about -0.43 per unit of risk. If you would invest 2,625,000 in Haesung DS Co on August 31, 2024 and sell it today you would lose (405,000) from holding Haesung DS Co or give up 15.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Haesung DS Co vs. Microfriend
Performance |
| Timeline |
| Haesung DS |
| Microfriend |
Haesung DS and Microfriend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haesung DS and Microfriend
The main advantage of trading using opposite Haesung DS and Microfriend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haesung DS position performs unexpectedly, Microfriend 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 Microfriend will offset losses from the drop in Microfriend's long position.| Haesung DS vs. Youngsin Metal Industrial | Haesung DS vs. Dongwon Metal Co | Haesung DS vs. Green Cross Medical | Haesung DS vs. Daou Data Corp |
| Microfriend vs. SK Hynix | Microfriend vs. LX Semicon Co | Microfriend vs. Tokai Carbon Korea | Microfriend vs. People 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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