Correlation Between Kg Chemical and Tamul Multimedia
Can any of the company-specific risk be diversified away by investing in both Kg Chemical and Tamul Multimedia 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 Kg Chemical and Tamul Multimedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kg Chemical and Tamul Multimedia Co, you can compare the effects of market volatilities on Kg Chemical and Tamul Multimedia 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 Kg Chemical with a short position of Tamul Multimedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kg Chemical and Tamul Multimedia.
Diversification Opportunities for Kg Chemical and Tamul Multimedia
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 001390 and Tamul is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Kg Chemical and Tamul Multimedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tamul Multimedia and Kg Chemical 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 Kg Chemical are associated (or correlated) with Tamul Multimedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tamul Multimedia has no effect on the direction of Kg Chemical i.e., Kg Chemical and Tamul Multimedia go up and down completely randomly.
Pair Corralation between Kg Chemical and Tamul Multimedia
Assuming the 90 days trading horizon Kg Chemical is expected to generate 0.41 times more return on investment than Tamul Multimedia. However, Kg Chemical is 2.46 times less risky than Tamul Multimedia. It trades about -0.15 of its potential returns per unit of risk. Tamul Multimedia Co is currently generating about -0.39 per unit of risk. If you would invest 384,500 in Kg Chemical on November 7, 2024 and sell it today you would lose (17,500) from holding Kg Chemical or give up 4.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kg Chemical vs. Tamul Multimedia Co
Performance |
| Timeline |
| Kg Chemical |
| Tamul Multimedia |
Kg Chemical and Tamul Multimedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kg Chemical and Tamul Multimedia
The main advantage of trading using opposite Kg Chemical and Tamul Multimedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kg Chemical position performs unexpectedly, Tamul Multimedia 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 Tamul Multimedia will offset losses from the drop in Tamul Multimedia's long position.| Kg Chemical vs. Hansol Chemical Co | Kg Chemical vs. Dongwoon Anatech Co | Kg Chemical vs. Orbitech Co | Kg Chemical vs. V One Tech 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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