Correlation Between Tae Kyung and Sung Bo
Can any of the company-specific risk be diversified away by investing in both Tae Kyung and Sung Bo 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 Sung Bo 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 Sung Bo Chemicals, you can compare the effects of market volatilities on Tae Kyung and Sung Bo 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 Sung Bo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tae Kyung and Sung Bo.
Diversification Opportunities for Tae Kyung and Sung Bo
Very weak diversification
The 3 months correlation between Tae and Sung is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Tae Kyung Chemical and Sung Bo Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sung Bo Chemicals 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 Sung Bo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sung Bo Chemicals has no effect on the direction of Tae Kyung i.e., Tae Kyung and Sung Bo go up and down completely randomly.
Pair Corralation between Tae Kyung and Sung Bo
Assuming the 90 days trading horizon Tae Kyung Chemical is expected to generate 2.42 times more return on investment than Sung Bo. However, Tae Kyung is 2.42 times more volatile than Sung Bo Chemicals. It trades about 0.01 of its potential returns per unit of risk. Sung Bo Chemicals is currently generating about -0.27 per unit of risk. If you would invest 1,089,000 in Tae Kyung Chemical on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Tae Kyung Chemical or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tae Kyung Chemical vs. Sung Bo Chemicals
Performance |
| Timeline |
| Tae Kyung Chemical |
| Sung Bo Chemicals |
Tae Kyung and Sung Bo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tae Kyung and Sung Bo
The main advantage of trading using opposite Tae Kyung and Sung Bo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tae Kyung position performs unexpectedly, Sung Bo 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 Sung Bo will offset losses from the drop in Sung Bo's long position.| Tae Kyung vs. AptaBio Therapeutics | Tae Kyung vs. Daewoo SBI SPAC | Tae Kyung vs. Dream Security co | Tae Kyung vs. Microfriend |
| Sung Bo vs. AptaBio Therapeutics | Sung Bo vs. Daewoo SBI SPAC | Sung Bo vs. Dream Security co | Sung Bo 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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