Correlation Between HB Technology and Sajo Seafood

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

By analyzing existing cross correlation between HB Technology TD and Sajo Seafood, you can compare the effects of market volatilities on HB Technology and Sajo Seafood 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 HB Technology with a short position of Sajo Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of HB Technology and Sajo Seafood.

Diversification Opportunities for HB Technology and Sajo Seafood

0.37

Correlation Coefficient

HB Technology  Sajo Seafood

Weak diversification

The 3 months correlation between 078150 and Sajo is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding HB Technology TD and Sajo Seafood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sajo Seafood and HB Technology 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 HB Technology TD are associated (or correlated) with Sajo Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sajo Seafood has no effect on the direction of HB Technology i.e., HB Technology and Sajo Seafood go up and down completely randomly.

Pair Corralation between HB Technology and Sajo Seafood

Assuming the 90 days trading horizon HB Technology TD is expected to generate 1.2 times more return on investment than Sajo Seafood. However, HB Technology is 1.2 times more volatile than Sajo Seafood. It trades about 0.04 of its potential returns per unit of risk. Sajo Seafood is currently generating about 0.0 per unit of risk. If you would invest  191,867  in HB Technology TD on October 24, 2024 and sell it today you would earn a total of  71,133  from holding HB Technology TD or generate 37.07% return on investment over 90 days.

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

HB Technology TD  vs.  Sajo Seafood

HB Technology TD

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in HB Technology TD are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, HB Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Sajo Seafood

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sajo Seafood has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with HB Technology and Sajo Seafood

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

The idea behind HB Technology TD and Sajo Seafood 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.