Correlation Between DAEDUCK ELECTRONICS and Haitai Confectionery
Can any of the company-specific risk be diversified away by investing in both DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS and Haitai Confectionery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DAEDUCK ELECTRONICS CoLtd and Haitai Confectionery Foods, you can compare the effects of market volatilities on DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS with a short position of Haitai Confectionery. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAEDUCK ELECTRONICS and Haitai Confectionery.
Diversification Opportunities for DAEDUCK ELECTRONICS and Haitai Confectionery
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DAEDUCK and Haitai is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding DAEDUCK ELECTRONICS CoLtd and Haitai Confectionery Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haitai Confectionery and DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS CoLtd 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 DAEDUCK ELECTRONICS i.e., DAEDUCK ELECTRONICS and Haitai Confectionery go up and down completely randomly.
Pair Corralation between DAEDUCK ELECTRONICS and Haitai Confectionery
Assuming the 90 days trading horizon DAEDUCK ELECTRONICS CoLtd is expected to under-perform the Haitai Confectionery. But the stock apears to be less risky and, when comparing its historical volatility, DAEDUCK ELECTRONICS CoLtd is 2.2 times less risky than Haitai Confectionery. The stock trades about -0.05 of its potential returns per unit of risk. The Haitai Confectionery Foods is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 513,723 in Haitai Confectionery Foods on August 29, 2024 and sell it today you would earn a total of 92,277 from holding Haitai Confectionery Foods or generate 17.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAEDUCK ELECTRONICS CoLtd vs. Haitai Confectionery Foods
Performance |
| Timeline |
| DAEDUCK ELECTRONICS CoLtd |
| Haitai Confectionery |
DAEDUCK ELECTRONICS and Haitai Confectionery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DAEDUCK ELECTRONICS and Haitai Confectionery
The main advantage of trading using opposite DAEDUCK ELECTRONICS and Haitai Confectionery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAEDUCK ELECTRONICS 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.| DAEDUCK ELECTRONICS vs. Samji Electronics Co | DAEDUCK ELECTRONICS vs. Samlip General Foods | DAEDUCK ELECTRONICS vs. LG Electronics Pfd | DAEDUCK ELECTRONICS vs. Sam Yang Foods |
| Haitai Confectionery vs. WooDeumGee Farm Co, | Haitai Confectionery vs. Wireless Power Amplifier | Haitai Confectionery vs. Miwon Chemicals Co | Haitai Confectionery vs. Playgram 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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