Correlation Between Tae Kyung and Ssangyong Information
Can any of the company-specific risk be diversified away by investing in both Tae Kyung and Ssangyong Information 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 Ssangyong Information 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 Ssangyong Information Communication, you can compare the effects of market volatilities on Tae Kyung and Ssangyong Information 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 Ssangyong Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tae Kyung and Ssangyong Information.
Diversification Opportunities for Tae Kyung and Ssangyong Information
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Tae and Ssangyong is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Tae Kyung Chemical and Ssangyong Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssangyong Information 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 Ssangyong Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ssangyong Information has no effect on the direction of Tae Kyung i.e., Tae Kyung and Ssangyong Information go up and down completely randomly.
Pair Corralation between Tae Kyung and Ssangyong Information
Assuming the 90 days trading horizon Tae Kyung Chemical is expected to generate 1.37 times more return on investment than Ssangyong Information. However, Tae Kyung is 1.37 times more volatile than Ssangyong Information Communication. It trades about -0.03 of its potential returns per unit of risk. Ssangyong Information Communication is currently generating about -0.14 per unit of risk. If you would invest 1,290,000 in Tae Kyung Chemical on August 27, 2024 and sell it today you would lose (201,000) from holding Tae Kyung Chemical or give up 15.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tae Kyung Chemical vs. Ssangyong Information Communic
Performance |
| Timeline |
| Tae Kyung Chemical |
| Ssangyong Information |
Tae Kyung and Ssangyong Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tae Kyung and Ssangyong Information
The main advantage of trading using opposite Tae Kyung and Ssangyong Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tae Kyung position performs unexpectedly, Ssangyong Information 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 Ssangyong Information will offset losses from the drop in Ssangyong Information's long position.| Tae Kyung vs. SK Chemicals Co | Tae Kyung vs. Hankuk Steel Wire | Tae Kyung vs. Dongbu Steel Co | Tae Kyung vs. Sung Bo Chemicals |
| Ssangyong Information vs. Lotte Energy Materials | Ssangyong Information vs. RF Materials Co | Ssangyong Information vs. Ecoplastic | Ssangyong Information vs. Top Material Co |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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