Correlation Between Taeyang Metal and Kyobo 3
Can any of the company-specific risk be diversified away by investing in both Taeyang Metal and Kyobo 3 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 Kyobo 3 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 Kyobo 3 SPAC, you can compare the effects of market volatilities on Taeyang Metal and Kyobo 3 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 Kyobo 3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taeyang Metal and Kyobo 3.
Diversification Opportunities for Taeyang Metal and Kyobo 3
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Taeyang and Kyobo is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Taeyang Metal Industrial and Kyobo 3 SPAC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyobo 3 SPAC 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 Kyobo 3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyobo 3 SPAC has no effect on the direction of Taeyang Metal i.e., Taeyang Metal and Kyobo 3 go up and down completely randomly.
Pair Corralation between Taeyang Metal and Kyobo 3
Assuming the 90 days trading horizon Taeyang Metal Industrial is expected to generate 2.66 times more return on investment than Kyobo 3. However, Taeyang Metal is 2.66 times more volatile than Kyobo 3 SPAC. It trades about 0.06 of its potential returns per unit of risk. Kyobo 3 SPAC is currently generating about -0.1 per unit of risk. If you would invest 299,624 in Taeyang Metal Industrial on September 12, 2024 and sell it today you would earn a total of 251,376 from holding Taeyang Metal Industrial or generate 83.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.71% |
| Values | Daily Returns |
Taeyang Metal Industrial vs. Kyobo 3 SPAC
Performance |
| Timeline |
| Taeyang Metal Industrial |
| Kyobo 3 SPAC |
Taeyang Metal and Kyobo 3 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taeyang Metal and Kyobo 3
The main advantage of trading using opposite Taeyang Metal and Kyobo 3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taeyang Metal position performs unexpectedly, Kyobo 3 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 Kyobo 3 will offset losses from the drop in Kyobo 3'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 |
| Kyobo 3 vs. Miwon Chemical | Kyobo 3 vs. DataSolution | Kyobo 3 vs. Hansol Chemical Co | Kyobo 3 vs. Lotte Data Communication |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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