Correlation Between Korea Industrial and Tae Kyung
Can any of the company-specific risk be diversified away by investing in both Korea Industrial 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 Korea Industrial and Tae Kyung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Industrial Co and Tae Kyung Chemical, you can compare the effects of market volatilities on Korea Industrial 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 Korea Industrial with a short position of Tae Kyung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Industrial and Tae Kyung.
Diversification Opportunities for Korea Industrial and Tae Kyung
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Korea and Tae is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Korea Industrial Co 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 Korea Industrial 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 Korea Industrial Co 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 Korea Industrial i.e., Korea Industrial and Tae Kyung go up and down completely randomly.
Pair Corralation between Korea Industrial and Tae Kyung
Assuming the 90 days trading horizon Korea Industrial Co is expected to generate 1.01 times more return on investment than Tae Kyung. However, Korea Industrial is 1.01 times more volatile than Tae Kyung Chemical. It trades about 0.27 of its potential returns per unit of risk. Tae Kyung Chemical is currently generating about -0.03 per unit of risk. If you would invest 271,000 in Korea Industrial Co on November 7, 2024 and sell it today you would earn a total of 26,000 from holding Korea Industrial Co or generate 9.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Industrial Co vs. Tae Kyung Chemical
Performance |
| Timeline |
| Korea Industrial |
| Tae Kyung Chemical |
Korea Industrial and Tae Kyung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Industrial and Tae Kyung
The main advantage of trading using opposite Korea Industrial and Tae Kyung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Industrial 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.| Korea Industrial vs. AptaBio Therapeutics | Korea Industrial vs. Daewoo SBI SPAC | Korea Industrial vs. Dream Security co | Korea Industrial vs. Microfriend |
| Tae Kyung vs. AptaBio Therapeutics | Tae Kyung vs. Daewoo SBI SPAC | Tae Kyung vs. Dream Security co | Tae Kyung vs. Microfriend |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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