Correlation Between Taekwang Ind and Pungguk Ethanol
Can any of the company-specific risk be diversified away by investing in both Taekwang Ind and Pungguk Ethanol 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 Taekwang Ind and Pungguk Ethanol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taekwang Ind and Pungguk Ethanol Industrial, you can compare the effects of market volatilities on Taekwang Ind and Pungguk Ethanol 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 Taekwang Ind with a short position of Pungguk Ethanol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taekwang Ind and Pungguk Ethanol.
Diversification Opportunities for Taekwang Ind and Pungguk Ethanol
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Taekwang and Pungguk is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Taekwang Ind and Pungguk Ethanol Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pungguk Ethanol Indu and Taekwang Ind 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 Taekwang Ind are associated (or correlated) with Pungguk Ethanol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pungguk Ethanol Indu has no effect on the direction of Taekwang Ind i.e., Taekwang Ind and Pungguk Ethanol go up and down completely randomly.
Pair Corralation between Taekwang Ind and Pungguk Ethanol
Assuming the 90 days trading horizon Taekwang Ind is expected to under-perform the Pungguk Ethanol. In addition to that, Taekwang Ind is 3.85 times more volatile than Pungguk Ethanol Industrial. It trades about -0.08 of its total potential returns per unit of risk. Pungguk Ethanol Industrial is currently generating about -0.2 per unit of volatility. If you would invest 1,014,000 in Pungguk Ethanol Industrial on September 3, 2024 and sell it today you would lose (27,000) from holding Pungguk Ethanol Industrial or give up 2.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taekwang Ind vs. Pungguk Ethanol Industrial
Performance |
| Timeline |
| Taekwang Ind |
| Pungguk Ethanol Indu |
Taekwang Ind and Pungguk Ethanol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taekwang Ind and Pungguk Ethanol
The main advantage of trading using opposite Taekwang Ind and Pungguk Ethanol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taekwang Ind position performs unexpectedly, Pungguk Ethanol 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 Pungguk Ethanol will offset losses from the drop in Pungguk Ethanol's long position.| Taekwang Ind vs. LG Chemicals | Taekwang Ind vs. POSCO Holdings | Taekwang Ind vs. Hanwha Solutions | Taekwang Ind vs. Lotte Chemical Corp |
| Pungguk Ethanol vs. SCI Information Service | Pungguk Ethanol vs. Cots Technology Co | Pungguk Ethanol vs. Shinsegae Information Communication | Pungguk Ethanol vs. Taegu Broadcasting |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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