Correlation Between Tae Kyung and Korea Industrial
Can any of the company-specific risk be diversified away by investing in both Tae Kyung and Korea Industrial 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 Tae Kyung and Korea Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tae Kyung Chemical and Korea Industrial Co, you can compare the effects of market volatilities on Tae Kyung and Korea Industrial 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 Tae Kyung with a short position of Korea Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tae Kyung and Korea Industrial.
Diversification Opportunities for Tae Kyung and Korea Industrial
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tae and Korea is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Tae Kyung Chemical and Korea Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Industrial and Tae Kyung 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 Tae Kyung Chemical are associated (or correlated) with Korea Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Industrial has no effect on the direction of Tae Kyung i.e., Tae Kyung and Korea Industrial go up and down completely randomly.
Pair Corralation between Tae Kyung and Korea Industrial
Assuming the 90 days trading horizon Tae Kyung Chemical is expected to under-perform the Korea Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Tae Kyung Chemical is 1.01 times less risky than Korea Industrial. The stock trades about -0.03 of its potential returns per unit of risk. The Korea Industrial Co is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 271,000 in Korea Industrial Co on November 7, 2024 and sell it today you would earn a total of 26,000 from holding Korea Industrial Co or generate 9.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tae Kyung Chemical vs. Korea Industrial Co
Performance |
| Timeline |
| Tae Kyung Chemical |
| Korea Industrial |
Tae Kyung and Korea Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tae Kyung and Korea Industrial
The main advantage of trading using opposite Tae Kyung and Korea Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tae Kyung position performs unexpectedly, Korea Industrial 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 Industrial will offset losses from the drop in Korea Industrial's long position.| Tae Kyung vs. AptaBio Therapeutics | Tae Kyung vs. Daewoo SBI SPAC | Tae Kyung vs. Dream Security co | Tae Kyung vs. Microfriend |
| Korea Industrial vs. AptaBio Therapeutics | Korea Industrial vs. Daewoo SBI SPAC | Korea Industrial vs. Dream Security co | Korea Industrial 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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