Correlation Between Taeyang Metal and Echomarketing CoLtd
Can any of the company-specific risk be diversified away by investing in both Taeyang Metal and Echomarketing 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 Echomarketing 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 Echomarketing CoLtd, you can compare the effects of market volatilities on Taeyang Metal and Echomarketing 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 Echomarketing CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taeyang Metal and Echomarketing CoLtd.
Diversification Opportunities for Taeyang Metal and Echomarketing CoLtd
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Taeyang and Echomarketing is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Taeyang Metal Industrial and Echomarketing CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Echomarketing 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 Echomarketing CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Echomarketing CoLtd has no effect on the direction of Taeyang Metal i.e., Taeyang Metal and Echomarketing CoLtd go up and down completely randomly.
Pair Corralation between Taeyang Metal and Echomarketing CoLtd
Assuming the 90 days trading horizon Taeyang Metal Industrial is expected to under-perform the Echomarketing CoLtd. But the stock apears to be less risky and, when comparing its historical volatility, Taeyang Metal Industrial is 1.28 times less risky than Echomarketing CoLtd. The stock trades about -0.22 of its potential returns per unit of risk. The Echomarketing CoLtd is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 1,049,000 in Echomarketing CoLtd on August 29, 2024 and sell it today you would lose (65,000) from holding Echomarketing CoLtd or give up 6.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taeyang Metal Industrial vs. Echomarketing CoLtd
Performance |
| Timeline |
| Taeyang Metal Industrial |
| Echomarketing CoLtd |
Taeyang Metal and Echomarketing CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taeyang Metal and Echomarketing CoLtd
The main advantage of trading using opposite Taeyang Metal and Echomarketing CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taeyang Metal position performs unexpectedly, Echomarketing 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 Echomarketing CoLtd will offset losses from the drop in Echomarketing CoLtd's long position.| Taeyang Metal vs. AptaBio Therapeutics | Taeyang Metal vs. Daewoo SBI SPAC | Taeyang Metal vs. Dream Security co | Taeyang Metal vs. Microfriend |
| Echomarketing CoLtd vs. Korea New Network | Echomarketing CoLtd vs. Busan Industrial Co | Echomarketing CoLtd vs. Busan Ind | Echomarketing CoLtd vs. Shinhan WTI Futures |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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