Correlation Between BGF Retail and Haitai Confectionery
Can any of the company-specific risk be diversified away by investing in both BGF Retail 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 BGF Retail and Haitai Confectionery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BGF Retail Co and Haitai Confectionery Foods, you can compare the effects of market volatilities on BGF Retail 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 BGF Retail with a short position of Haitai Confectionery. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGF Retail and Haitai Confectionery.
Diversification Opportunities for BGF Retail and Haitai Confectionery
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between BGF and Haitai is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding BGF Retail Co and Haitai Confectionery Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haitai Confectionery and BGF Retail 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 BGF Retail Co 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 BGF Retail i.e., BGF Retail and Haitai Confectionery go up and down completely randomly.
Pair Corralation between BGF Retail and Haitai Confectionery
Assuming the 90 days trading horizon BGF Retail Co is expected to under-perform the Haitai Confectionery. But the stock apears to be less risky and, when comparing its historical volatility, BGF Retail Co is 1.27 times less risky than Haitai Confectionery. The stock trades about -0.06 of its potential returns per unit of risk. The Haitai Confectionery Foods is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 566,734 in Haitai Confectionery Foods on August 29, 2024 and sell it today you would earn a total of 39,266 from holding Haitai Confectionery Foods or generate 6.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BGF Retail Co vs. Haitai Confectionery Foods
Performance |
| Timeline |
| BGF Retail |
| Haitai Confectionery |
BGF Retail and Haitai Confectionery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BGF Retail and Haitai Confectionery
The main advantage of trading using opposite BGF Retail and Haitai Confectionery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BGF Retail 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.| BGF Retail vs. AptaBio Therapeutics | BGF Retail vs. Daewoo SBI SPAC | BGF Retail vs. Dream Security co | BGF Retail vs. Microfriend |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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