Correlation Between Haitai Confectionery and Tae Kyung
Can any of the company-specific risk be diversified away by investing in both Haitai Confectionery and Tae Kyung 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 Haitai Confectionery and Tae Kyung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haitai Confectionery Foods and Tae Kyung Chemical, you can compare the effects of market volatilities on Haitai Confectionery and Tae Kyung 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 Haitai Confectionery with a short position of Tae Kyung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haitai Confectionery and Tae Kyung.
Diversification Opportunities for Haitai Confectionery and Tae Kyung
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Haitai and Tae is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Haitai Confectionery Foods and Tae Kyung Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tae Kyung Chemical and Haitai Confectionery 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 Haitai Confectionery Foods are associated (or correlated) with Tae Kyung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tae Kyung Chemical has no effect on the direction of Haitai Confectionery i.e., Haitai Confectionery and Tae Kyung go up and down completely randomly.
Pair Corralation between Haitai Confectionery and Tae Kyung
Assuming the 90 days trading horizon Haitai Confectionery Foods is expected to generate 1.12 times more return on investment than Tae Kyung. However, Haitai Confectionery is 1.12 times more volatile than Tae Kyung Chemical. It trades about 0.07 of its potential returns per unit of risk. Tae Kyung Chemical is currently generating about 0.05 per unit of risk. If you would invest 580,000 in Haitai Confectionery Foods on September 21, 2024 and sell it today you would earn a total of 48,000 from holding Haitai Confectionery Foods or generate 8.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Haitai Confectionery Foods vs. Tae Kyung Chemical
Performance |
Timeline |
Haitai Confectionery |
Tae Kyung Chemical |
Haitai Confectionery and Tae Kyung Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Haitai Confectionery and Tae Kyung
The main advantage of trading using opposite Haitai Confectionery and Tae Kyung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haitai Confectionery position performs unexpectedly, Tae Kyung 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 Tae Kyung will offset losses from the drop in Tae Kyung's long position.Haitai Confectionery vs. Adaptive Plasma Technology | Haitai Confectionery vs. FOODWELL Co | Haitai Confectionery vs. Daou Technology | Haitai Confectionery vs. Dongil Technology |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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