Correlation Between Taeyang Metal and EyeGene
Can any of the company-specific risk be diversified away by investing in both Taeyang Metal and EyeGene 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 EyeGene 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 EyeGene, you can compare the effects of market volatilities on Taeyang Metal and EyeGene 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 EyeGene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taeyang Metal and EyeGene.
Diversification Opportunities for Taeyang Metal and EyeGene
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Taeyang and EyeGene is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Taeyang Metal Industrial and EyeGene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EyeGene 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 EyeGene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EyeGene has no effect on the direction of Taeyang Metal i.e., Taeyang Metal and EyeGene go up and down completely randomly.
Pair Corralation between Taeyang Metal and EyeGene
Assuming the 90 days trading horizon Taeyang Metal Industrial is expected to generate 4.75 times more return on investment than EyeGene. However, Taeyang Metal is 4.75 times more volatile than EyeGene. It trades about 0.12 of its potential returns per unit of risk. EyeGene is currently generating about -0.21 per unit of risk. If you would invest 510,000 in Taeyang Metal Industrial on September 9, 2024 and sell it today you would earn a total of 88,000 from holding Taeyang Metal Industrial or generate 17.25% 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. EyeGene
Performance |
Timeline |
Taeyang Metal Industrial |
EyeGene |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Taeyang Metal and EyeGene Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Taeyang Metal and EyeGene
The main advantage of trading using opposite Taeyang Metal and EyeGene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taeyang Metal position performs unexpectedly, EyeGene 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 EyeGene will offset losses from the drop in EyeGene's long position.Taeyang Metal vs. AptaBio Therapeutics | Taeyang Metal vs. Daewoo SBI SPAC | Taeyang Metal vs. Dream Security co | Taeyang Metal vs. Microfriend |
EyeGene vs. Korea Petro Chemical | EyeGene vs. Youngbo Chemical Co | EyeGene vs. Kukil Metal Co | EyeGene vs. Duksan Hi Metal |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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