Correlation Between Taeyang Metal and GemVaxKAEL CoLtd
Can any of the company-specific risk be diversified away by investing in both Taeyang Metal and GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd, you can compare the effects of market volatilities on Taeyang Metal and GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taeyang Metal and GemVaxKAEL CoLtd.
Diversification Opportunities for Taeyang Metal and GemVaxKAEL CoLtd
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Taeyang and GemVaxKAEL is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Taeyang Metal Industrial and GemVaxKAEL CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GemVaxKAEL CoLtd has no effect on the direction of Taeyang Metal i.e., Taeyang Metal and GemVaxKAEL CoLtd go up and down completely randomly.
Pair Corralation between Taeyang Metal and GemVaxKAEL CoLtd
Assuming the 90 days trading horizon Taeyang Metal Industrial is expected to generate 1.82 times more return on investment than GemVaxKAEL CoLtd. However, Taeyang Metal is 1.82 times more volatile than GemVaxKAEL CoLtd. It trades about 0.06 of its potential returns per unit of risk. GemVaxKAEL CoLtd is currently generating about 0.03 per unit of risk. If you would invest 241,684 in Taeyang Metal Industrial on September 12, 2024 and sell it today you would earn a total of 309,316 from holding Taeyang Metal Industrial or generate 127.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taeyang Metal Industrial vs. GemVaxKAEL CoLtd
Performance |
| Timeline |
| Taeyang Metal Industrial |
| GemVaxKAEL CoLtd |
Taeyang Metal and GemVaxKAEL CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taeyang Metal and GemVaxKAEL CoLtd
The main advantage of trading using opposite Taeyang Metal and GemVaxKAEL CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taeyang Metal position performs unexpectedly, GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd will offset losses from the drop in GemVaxKAEL CoLtd's long position.| Taeyang Metal vs. Samsung Electronics Co | Taeyang Metal vs. Samsung Electronics Co | Taeyang Metal vs. SK Hynix | Taeyang Metal vs. POSCO Holdings |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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