Correlation Between Tae Kyung and BIT Computer
Can any of the company-specific risk be diversified away by investing in both Tae Kyung and BIT Computer 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 BIT Computer 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 BIT Computer Co, you can compare the effects of market volatilities on Tae Kyung and BIT Computer 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 BIT Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tae Kyung and BIT Computer.
Diversification Opportunities for Tae Kyung and BIT Computer
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tae and BIT is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Tae Kyung Chemical and BIT Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIT Computer 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 BIT Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIT Computer has no effect on the direction of Tae Kyung i.e., Tae Kyung and BIT Computer go up and down completely randomly.
Pair Corralation between Tae Kyung and BIT Computer
Assuming the 90 days trading horizon Tae Kyung Chemical is expected to generate 1.37 times more return on investment than BIT Computer. However, Tae Kyung is 1.37 times more volatile than BIT Computer Co. It trades about 0.07 of its potential returns per unit of risk. BIT Computer Co is currently generating about -0.1 per unit of risk. If you would invest 1,097,000 in Tae Kyung Chemical on November 8, 2024 and sell it today you would earn a total of 23,000 from holding Tae Kyung Chemical or generate 2.1% 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. BIT Computer Co
Performance |
| Timeline |
| Tae Kyung Chemical |
| BIT Computer |
Tae Kyung and BIT Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tae Kyung and BIT Computer
The main advantage of trading using opposite Tae Kyung and BIT Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tae Kyung position performs unexpectedly, BIT Computer 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 BIT Computer will offset losses from the drop in BIT Computer's long position.| Tae Kyung vs. Nice Information Telecommunication | Tae Kyung vs. Daishin Information Communications | Tae Kyung vs. Haitai Confectionery Foods | Tae Kyung vs. Korea Information Communications |
| BIT Computer vs. iNtRON Biotechnology | BIT Computer vs. Playgram Co | BIT Computer vs. PLAYWITH | BIT Computer vs. CKH Food Health |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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