Correlation Between Settlebank and HB Technology
Can any of the company-specific risk be diversified away by investing in both Settlebank and HB Technology 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 Settlebank and HB Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Settlebank and HB Technology TD, you can compare the effects of market volatilities on Settlebank and HB Technology 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 Settlebank with a short position of HB Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Settlebank and HB Technology.
Diversification Opportunities for Settlebank and HB Technology
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Settlebank and 078150 is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Settlebank and HB Technology TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HB Technology TD and Settlebank 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 Settlebank are associated (or correlated) with HB Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HB Technology TD has no effect on the direction of Settlebank i.e., Settlebank and HB Technology go up and down completely randomly.
Pair Corralation between Settlebank and HB Technology
Assuming the 90 days trading horizon Settlebank is expected to under-perform the HB Technology. But the stock apears to be less risky and, when comparing its historical volatility, Settlebank is 2.01 times less risky than HB Technology. The stock trades about -0.12 of its potential returns per unit of risk. The HB Technology TD is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 194,700 in HB Technology TD on October 30, 2024 and sell it today you would earn a total of 53,800 from holding HB Technology TD or generate 27.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Settlebank vs. HB Technology TD
Performance |
| Timeline |
| Settlebank |
| HB Technology TD |
Settlebank and HB Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Settlebank and HB Technology
The main advantage of trading using opposite Settlebank and HB Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Settlebank position performs unexpectedly, HB Technology 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 HB Technology will offset losses from the drop in HB Technology's long position.| Settlebank vs. Nable Communications | Settlebank vs. Ssangyong Information Communication | Settlebank vs. Korea Information Communications | Settlebank vs. Hanjin Transportation Co |
| HB Technology vs. Finebesteel | HB Technology vs. CJ Seafood Corp | HB Technology vs. Samyang Foods Co | HB Technology vs. Seah Steel Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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