Correlation Between Taekwang Ind and Handok Clean
Can any of the company-specific risk be diversified away by investing in both Taekwang Ind and Handok Clean 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 Handok Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taekwang Ind and Handok Clean Tech, you can compare the effects of market volatilities on Taekwang Ind and Handok Clean 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 Handok Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taekwang Ind and Handok Clean.
Diversification Opportunities for Taekwang Ind and Handok Clean
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Taekwang and Handok is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Taekwang Ind and Handok Clean Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Handok Clean Tech 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 Handok Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Handok Clean Tech has no effect on the direction of Taekwang Ind i.e., Taekwang Ind and Handok Clean go up and down completely randomly.
Pair Corralation between Taekwang Ind and Handok Clean
Assuming the 90 days trading horizon Taekwang Ind is expected to generate 1.2 times less return on investment than Handok Clean. But when comparing it to its historical volatility, Taekwang Ind is 1.35 times less risky than Handok Clean. It trades about 0.05 of its potential returns per unit of risk. Handok Clean Tech is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 616,483 in Handok Clean Tech on October 26, 2024 and sell it today you would earn a total of 17,517 from holding Handok Clean Tech or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Taekwang Ind vs. Handok Clean Tech
Performance |
| Timeline |
| Taekwang Ind |
| Handok Clean Tech |
Taekwang Ind and Handok Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taekwang Ind and Handok Clean
The main advantage of trading using opposite Taekwang Ind and Handok Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taekwang Ind position performs unexpectedly, Handok Clean 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 Handok Clean will offset losses from the drop in Handok Clean's long position.| Taekwang Ind vs. Handok Clean Tech | Taekwang Ind vs. SEOJEON ELECTRIC MACHINERY | Taekwang Ind vs. Clean Science co | Taekwang Ind vs. CG Hi Tech |
| Handok Clean vs. CKH Food Health | Handok Clean vs. Woorim Machinery Co | Handok Clean vs. Kyeryong Construction Industrial | Handok Clean vs. FOODWELL 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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