Correlation Between KHVATEC CoLtd and Humax

Can any of the company-specific risk be diversified away by investing in both KHVATEC CoLtd and Humax 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 KHVATEC CoLtd and Humax into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KHVATEC CoLtd and Humax Co, you can compare the effects of market volatilities on KHVATEC CoLtd and Humax 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 KHVATEC CoLtd with a short position of Humax. Check out your portfolio center. Please also check ongoing floating volatility patterns of KHVATEC CoLtd and Humax.

Diversification Opportunities for KHVATEC CoLtd and Humax

0.43

Correlation Coefficient

KHVATEC CoLtd  Humax

Very weak diversification

The 3 months correlation between KHVATEC and Humax is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding KHVATEC CoLtd and Humax Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humax and KHVATEC CoLtd 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 KHVATEC CoLtd are associated (or correlated) with Humax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humax has no effect on the direction of KHVATEC CoLtd i.e., KHVATEC CoLtd and Humax go up and down completely randomly.

Pair Corralation between KHVATEC CoLtd and Humax

Assuming the 90 days trading horizon KHVATEC CoLtd is expected to generate 0.94 times more return on investment than Humax. However, KHVATEC CoLtd is 1.07 times less risky than Humax. It trades about 0.09 of its potential returns per unit of risk. Humax Co is currently generating about 0.03 per unit of risk. If you would invest  809,331  in KHVATEC CoLtd on December 2, 2024 and sell it today you would earn a total of  133,669  from holding KHVATEC CoLtd or generate 16.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

KHVATEC CoLtd  vs.  Humax Co

KHVATEC CoLtd

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KHVATEC CoLtd are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, KHVATEC CoLtd sustained solid returns over the last few months and may actually be approaching a breakup point.

Humax

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Humax Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Humax is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with KHVATEC CoLtd and Humax

The main advantage of trading using opposite KHVATEC CoLtd and Humax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KHVATEC CoLtd position performs unexpectedly, Humax 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 Humax will offset losses from the drop in Humax's long position.

The idea behind KHVATEC CoLtd and Humax Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.