Correlation Between Tae Kyung and Kukdong Oil
Can any of the company-specific risk be diversified away by investing in both Tae Kyung and Kukdong Oil 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 Kukdong Oil 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 Kukdong Oil Chemicals, you can compare the effects of market volatilities on Tae Kyung and Kukdong Oil 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 Kukdong Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tae Kyung and Kukdong Oil.
Diversification Opportunities for Tae Kyung and Kukdong Oil
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tae and Kukdong is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Tae Kyung Chemical and Kukdong Oil Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukdong Oil 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 Kukdong Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukdong Oil Chemicals has no effect on the direction of Tae Kyung i.e., Tae Kyung and Kukdong Oil go up and down completely randomly.
Pair Corralation between Tae Kyung and Kukdong Oil
Assuming the 90 days trading horizon Tae Kyung is expected to generate 9.19 times less return on investment than Kukdong Oil. But when comparing it to its historical volatility, Tae Kyung Chemical is 1.47 times less risky than Kukdong Oil. It trades about 0.0 of its potential returns per unit of risk. Kukdong Oil Chemicals is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 325,245 in Kukdong Oil Chemicals on November 19, 2024 and sell it today you would earn a total of 18,755 from holding Kukdong Oil Chemicals or generate 5.77% 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. Kukdong Oil Chemicals
Performance |
| Timeline |
| Tae Kyung Chemical |
| Kukdong Oil Chemicals |
Tae Kyung and Kukdong Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tae Kyung and Kukdong Oil
The main advantage of trading using opposite Tae Kyung and Kukdong Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tae Kyung position performs unexpectedly, Kukdong Oil 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 Kukdong Oil will offset losses from the drop in Kukdong Oil's long position.| Tae Kyung vs. KPX Green Chemical | Tae Kyung vs. Jahwa Electronics Co | Tae Kyung vs. Hanil Chemical Ind | Tae Kyung vs. Lotte Chilsung Beverage |
| Kukdong Oil vs. Vissem Electronics Co | Kukdong Oil vs. Sewoon Medical Co | Kukdong Oil vs. Golden Bridge Investment | Kukdong Oil vs. EBEST Investment Securities |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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