Correlation Between Taeyang Metal and Samhwa Paint
Can any of the company-specific risk be diversified away by investing in both Taeyang Metal and Samhwa Paint 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 Taeyang Metal and Samhwa Paint into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taeyang Metal Industrial and Samhwa Paint Industrial, you can compare the effects of market volatilities on Taeyang Metal and Samhwa Paint 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 Taeyang Metal with a short position of Samhwa Paint. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taeyang Metal and Samhwa Paint.
Diversification Opportunities for Taeyang Metal and Samhwa Paint
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Taeyang and Samhwa is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Taeyang Metal Industrial and Samhwa Paint Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhwa Paint Industrial and Taeyang Metal 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 Taeyang Metal Industrial are associated (or correlated) with Samhwa Paint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhwa Paint Industrial has no effect on the direction of Taeyang Metal i.e., Taeyang Metal and Samhwa Paint go up and down completely randomly.
Pair Corralation between Taeyang Metal and Samhwa Paint
Assuming the 90 days trading horizon Taeyang Metal Industrial is expected to generate 2.06 times more return on investment than Samhwa Paint. However, Taeyang Metal is 2.06 times more volatile than Samhwa Paint Industrial. It trades about 0.05 of its potential returns per unit of risk. Samhwa Paint Industrial is currently generating about 0.02 per unit of risk. If you would invest 256,105 in Taeyang Metal Industrial on August 29, 2024 and sell it today you would earn a total of 176,395 from holding Taeyang Metal Industrial or generate 68.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taeyang Metal Industrial vs. Samhwa Paint Industrial
Performance |
| Timeline |
| Taeyang Metal Industrial |
| Samhwa Paint Industrial |
Taeyang Metal and Samhwa Paint Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taeyang Metal and Samhwa Paint
The main advantage of trading using opposite Taeyang Metal and Samhwa Paint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taeyang Metal position performs unexpectedly, Samhwa Paint 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 Samhwa Paint will offset losses from the drop in Samhwa Paint's long position.| Taeyang Metal vs. AptaBio Therapeutics | Taeyang Metal vs. Daewoo SBI SPAC | Taeyang Metal vs. Dream Security co | Taeyang Metal vs. Microfriend |
| Samhwa Paint vs. AptaBio Therapeutics | Samhwa Paint vs. Daewoo SBI SPAC | Samhwa Paint vs. Dream Security co | Samhwa Paint 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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