Correlation Between Tae Kyung and Automobile
Can any of the company-specific risk be diversified away by investing in both Tae Kyung and Automobile 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 Automobile 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 Automobile Pc, you can compare the effects of market volatilities on Tae Kyung and Automobile 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 Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tae Kyung and Automobile.
Diversification Opportunities for Tae Kyung and Automobile
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tae and Automobile is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Tae Kyung Chemical and Automobile Pc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automobile Pc 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 Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automobile Pc has no effect on the direction of Tae Kyung i.e., Tae Kyung and Automobile go up and down completely randomly.
Pair Corralation between Tae Kyung and Automobile
Assuming the 90 days trading horizon Tae Kyung is expected to generate 19.78 times less return on investment than Automobile. But when comparing it to its historical volatility, Tae Kyung Chemical is 3.38 times less risky than Automobile. It trades about 0.01 of its potential returns per unit of risk. Automobile Pc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 68,000 in Automobile Pc on August 29, 2024 and sell it today you would earn a total of 1,000.00 from holding Automobile Pc or generate 1.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tae Kyung Chemical vs. Automobile Pc
Performance |
| Timeline |
| Tae Kyung Chemical |
| Automobile Pc |
Tae Kyung and Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tae Kyung and Automobile
The main advantage of trading using opposite Tae Kyung and Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tae Kyung position performs unexpectedly, Automobile 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 Automobile will offset losses from the drop in Automobile's long position.| Tae Kyung vs. Seoul Electronics Telecom | Tae Kyung vs. Samsung Publishing Co | Tae Kyung vs. Visang Education | Tae Kyung vs. Hannong Chemicals |
| Automobile vs. Busan Industrial Co | Automobile vs. Busan Ind | Automobile vs. Mirae Asset Daewoo | Automobile vs. UNISEM 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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