Correlation Between Taeyang Metal and Bohae Brewery
Can any of the company-specific risk be diversified away by investing in both Taeyang Metal and Bohae Brewery 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 Bohae Brewery 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 Bohae Brewery, you can compare the effects of market volatilities on Taeyang Metal and Bohae Brewery 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 Bohae Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taeyang Metal and Bohae Brewery.
Diversification Opportunities for Taeyang Metal and Bohae Brewery
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Taeyang and Bohae is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Taeyang Metal Industrial and Bohae Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bohae Brewery 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 Bohae Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bohae Brewery has no effect on the direction of Taeyang Metal i.e., Taeyang Metal and Bohae Brewery go up and down completely randomly.
Pair Corralation between Taeyang Metal and Bohae Brewery
Assuming the 90 days trading horizon Taeyang Metal Industrial is expected to under-perform the Bohae Brewery. But the stock apears to be less risky and, when comparing its historical volatility, Taeyang Metal Industrial is 2.33 times less risky than Bohae Brewery. The stock trades about -0.14 of its potential returns per unit of risk. The Bohae Brewery is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 42,700 in Bohae Brewery on August 27, 2024 and sell it today you would earn a total of 3,300 from holding Bohae Brewery or generate 7.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taeyang Metal Industrial vs. Bohae Brewery
Performance |
| Timeline |
| Taeyang Metal Industrial |
| Bohae Brewery |
Taeyang Metal and Bohae Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taeyang Metal and Bohae Brewery
The main advantage of trading using opposite Taeyang Metal and Bohae Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taeyang Metal position performs unexpectedly, Bohae Brewery 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 Bohae Brewery will offset losses from the drop in Bohae Brewery's long position.| Taeyang Metal vs. AptaBio Therapeutics | Taeyang Metal vs. Daewoo SBI SPAC | Taeyang Metal vs. Dream Security co | Taeyang Metal vs. Microfriend |
| Bohae Brewery vs. AptaBio Therapeutics | Bohae Brewery vs. Daewoo SBI SPAC | Bohae Brewery vs. Dream Security co | Bohae Brewery 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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