Correlation Between WooDeumGee Farm and Haitai Confectionery
Can any of the company-specific risk be diversified away by investing in both WooDeumGee Farm 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 WooDeumGee Farm and Haitai Confectionery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WooDeumGee Farm Co, and Haitai Confectionery Foods, you can compare the effects of market volatilities on WooDeumGee Farm 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 WooDeumGee Farm with a short position of Haitai Confectionery. Check out your portfolio center. Please also check ongoing floating volatility patterns of WooDeumGee Farm and Haitai Confectionery.
Diversification Opportunities for WooDeumGee Farm and Haitai Confectionery
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WooDeumGee and Haitai is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding WooDeumGee Farm 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 WooDeumGee Farm 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 WooDeumGee Farm 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 WooDeumGee Farm i.e., WooDeumGee Farm and Haitai Confectionery go up and down completely randomly.
Pair Corralation between WooDeumGee Farm and Haitai Confectionery
Assuming the 90 days trading horizon WooDeumGee Farm Co, is expected to under-perform the Haitai Confectionery. But the stock apears to be less risky and, when comparing its historical volatility, WooDeumGee Farm Co, is 1.37 times less risky than Haitai Confectionery. The stock trades about -0.09 of its potential returns per unit of risk. The Haitai Confectionery Foods is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 580,000 in Haitai Confectionery Foods on August 29, 2024 and sell it today you would earn a total of 26,000 from holding Haitai Confectionery Foods or generate 4.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WooDeumGee Farm Co, vs. Haitai Confectionery Foods
Performance |
| Timeline |
| WooDeumGee Farm Co, |
| Haitai Confectionery |
WooDeumGee Farm and Haitai Confectionery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WooDeumGee Farm and Haitai Confectionery
The main advantage of trading using opposite WooDeumGee Farm and Haitai Confectionery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WooDeumGee Farm 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.| WooDeumGee Farm vs. Samsung Electronics Co | WooDeumGee Farm vs. Samsung Electronics Co | WooDeumGee Farm vs. LG Energy Solution | WooDeumGee Farm vs. SK Hynix |
| 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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