Correlation Between FoodNamoo and HansBiomed
Can any of the company-specific risk be diversified away by investing in both FoodNamoo and HansBiomed 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 FoodNamoo and HansBiomed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FoodNamoo and HansBiomed, you can compare the effects of market volatilities on FoodNamoo and HansBiomed 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 FoodNamoo with a short position of HansBiomed. Check out your portfolio center. Please also check ongoing floating volatility patterns of FoodNamoo and HansBiomed.
Diversification Opportunities for FoodNamoo and HansBiomed
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FoodNamoo and HansBiomed is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding FoodNamoo and HansBiomed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HansBiomed and FoodNamoo 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 FoodNamoo are associated (or correlated) with HansBiomed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HansBiomed has no effect on the direction of FoodNamoo i.e., FoodNamoo and HansBiomed go up and down completely randomly.
Pair Corralation between FoodNamoo and HansBiomed
Assuming the 90 days trading horizon FoodNamoo is expected to generate 1.03 times more return on investment than HansBiomed. However, FoodNamoo is 1.03 times more volatile than HansBiomed. It trades about -0.02 of its potential returns per unit of risk. HansBiomed is currently generating about -0.13 per unit of risk. If you would invest 323,000 in FoodNamoo on August 28, 2024 and sell it today you would lose (6,500) from holding FoodNamoo or give up 2.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FoodNamoo vs. HansBiomed
Performance |
| Timeline |
| FoodNamoo |
| HansBiomed |
FoodNamoo and HansBiomed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FoodNamoo and HansBiomed
The main advantage of trading using opposite FoodNamoo and HansBiomed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FoodNamoo position performs unexpectedly, HansBiomed 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 HansBiomed will offset losses from the drop in HansBiomed's long position.| FoodNamoo vs. Cots Technology Co | FoodNamoo vs. Clean Science co | FoodNamoo vs. Dong A Steel Technology | FoodNamoo vs. Daou Technology |
| HansBiomed vs. Dong A Steel Technology | HansBiomed vs. Puloon Technology | HansBiomed vs. Woori Technology | HansBiomed vs. FoodNamoo |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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