Correlation Between Taeyang Metal and Korea Investment
Can any of the company-specific risk be diversified away by investing in both Taeyang Metal and Korea Investment 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 Korea Investment 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 Korea Investment Holdings, you can compare the effects of market volatilities on Taeyang Metal and Korea Investment 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 Korea Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taeyang Metal and Korea Investment.
Diversification Opportunities for Taeyang Metal and Korea Investment
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Taeyang and Korea is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Taeyang Metal Industrial and Korea Investment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Investment Holdings 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 Korea Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Investment Holdings has no effect on the direction of Taeyang Metal i.e., Taeyang Metal and Korea Investment go up and down completely randomly.
Pair Corralation between Taeyang Metal and Korea Investment
Assuming the 90 days trading horizon Taeyang Metal Industrial is expected to under-perform the Korea Investment. In addition to that, Taeyang Metal is 2.85 times more volatile than Korea Investment Holdings. It trades about -0.12 of its total potential returns per unit of risk. Korea Investment Holdings is currently generating about 0.16 per unit of volatility. If you would invest 5,010,000 in Korea Investment Holdings on August 29, 2024 and sell it today you would earn a total of 320,000 from holding Korea Investment Holdings or generate 6.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taeyang Metal Industrial vs. Korea Investment Holdings
Performance |
| Timeline |
| Taeyang Metal Industrial |
| Korea Investment Holdings |
Taeyang Metal and Korea Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taeyang Metal and Korea Investment
The main advantage of trading using opposite Taeyang Metal and Korea Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taeyang Metal position performs unexpectedly, Korea Investment 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 Korea Investment will offset losses from the drop in Korea Investment's long position.| Taeyang Metal vs. AptaBio Therapeutics | Taeyang Metal vs. Daewoo SBI SPAC | Taeyang Metal vs. Dream Security co | Taeyang Metal vs. Microfriend |
| Korea Investment vs. AptaBio Therapeutics | Korea Investment vs. Daewoo SBI SPAC | Korea Investment vs. Dream Security co | Korea Investment 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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