Correlation Between Tae Kyung and HS Valve
Can any of the company-specific risk be diversified away by investing in both Tae Kyung and HS Valve 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 HS Valve 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 HS Valve Co, you can compare the effects of market volatilities on Tae Kyung and HS Valve 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 HS Valve. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tae Kyung and HS Valve.
Diversification Opportunities for Tae Kyung and HS Valve
Good diversification
The 3 months correlation between Tae and 039610 is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Tae Kyung Chemical and HS Valve Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HS Valve 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 HS Valve. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HS Valve has no effect on the direction of Tae Kyung i.e., Tae Kyung and HS Valve go up and down completely randomly.
Pair Corralation between Tae Kyung and HS Valve
Assuming the 90 days trading horizon Tae Kyung Chemical is expected to generate 0.43 times more return on investment than HS Valve. However, Tae Kyung Chemical is 2.31 times less risky than HS Valve. It trades about -0.02 of its potential returns per unit of risk. HS Valve Co is currently generating about -0.01 per unit of risk. If you would invest 1,249,546 in Tae Kyung Chemical on October 26, 2024 and sell it today you would lose (117,546) from holding Tae Kyung Chemical or give up 9.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.17% |
| Values | Daily Returns |
Tae Kyung Chemical vs. HS Valve Co
Performance |
| Timeline |
| Tae Kyung Chemical |
| HS Valve |
Tae Kyung and HS Valve Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tae Kyung and HS Valve
The main advantage of trading using opposite Tae Kyung and HS Valve positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tae Kyung position performs unexpectedly, HS Valve 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 HS Valve will offset losses from the drop in HS Valve's long position.| Tae Kyung vs. Daehan Steel | Tae Kyung vs. Sam Yang Foods | Tae Kyung vs. Hanjin Transportation Co | Tae Kyung vs. Bookook Steel |
| HS Valve vs. Daejung Chemicals Metals | HS Valve vs. Tae Kyung Chemical | HS Valve vs. Duksan Hi Metal | HS Valve vs. Youngchang Chemical 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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