Correlation Between Coloray International and HLB Power
Can any of the company-specific risk be diversified away by investing in both Coloray International and HLB Power 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 Coloray International and HLB Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coloray International Investment and HLB Power Co, you can compare the effects of market volatilities on Coloray International and HLB Power 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 Coloray International with a short position of HLB Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coloray International and HLB Power.
Diversification Opportunities for Coloray International and HLB Power
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Coloray and HLB is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Coloray International Investme and HLB Power Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HLB Power and Coloray International 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 Coloray International Investment are associated (or correlated) with HLB Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HLB Power has no effect on the direction of Coloray International i.e., Coloray International and HLB Power go up and down completely randomly.
Pair Corralation between Coloray International and HLB Power
Assuming the 90 days trading horizon Coloray International Investment is expected to under-perform the HLB Power. But the stock apears to be less risky and, when comparing its historical volatility, Coloray International Investment is 2.08 times less risky than HLB Power. The stock trades about -0.07 of its potential returns per unit of risk. The HLB Power Co is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 62,300 in HLB Power Co on September 14, 2024 and sell it today you would lose (26,300) from holding HLB Power Co or give up 42.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.59% |
| Values | Daily Returns |
Coloray International Investme vs. HLB Power Co
Performance |
| Timeline |
| Coloray International |
| HLB Power |
Coloray International and HLB Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coloray International and HLB Power
The main advantage of trading using opposite Coloray International and HLB Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coloray International position performs unexpectedly, HLB Power 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 HLB Power will offset losses from the drop in HLB Power's long position.| Coloray International vs. LG Chem | Coloray International vs. Chunbo Co | Coloray International vs. DukSan Neolux CoLtd | Coloray International vs. LIG ES SPAC |
| HLB Power vs. Korea New Network | HLB Power vs. Solution Advanced Technology | HLB Power vs. Busan Industrial Co | HLB Power vs. Busan Ind |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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