Correlation Between Tae Kyung and Kolon Life
Can any of the company-specific risk be diversified away by investing in both Tae Kyung and Kolon Life 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 Kolon Life 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 Kolon Life Science, you can compare the effects of market volatilities on Tae Kyung and Kolon Life 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 Kolon Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tae Kyung and Kolon Life.
Diversification Opportunities for Tae Kyung and Kolon Life
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tae and Kolon is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Tae Kyung Chemical and Kolon Life Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kolon Life Science 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 Kolon Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kolon Life Science has no effect on the direction of Tae Kyung i.e., Tae Kyung and Kolon Life go up and down completely randomly.
Pair Corralation between Tae Kyung and Kolon Life
Assuming the 90 days trading horizon Tae Kyung Chemical is expected to generate 1.02 times more return on investment than Kolon Life. However, Tae Kyung is 1.02 times more volatile than Kolon Life Science. It trades about 0.03 of its potential returns per unit of risk. Kolon Life Science is currently generating about 0.02 per unit of risk. If you would invest 1,064,000 in Tae Kyung Chemical on September 5, 2024 and sell it today you would earn a total of 23,000 from holding Tae Kyung Chemical or generate 2.16% 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. Kolon Life Science
Performance |
| Timeline |
| Tae Kyung Chemical |
| Kolon Life Science |
Tae Kyung and Kolon Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tae Kyung and Kolon Life
The main advantage of trading using opposite Tae Kyung and Kolon Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tae Kyung position performs unexpectedly, Kolon Life 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 Kolon Life will offset losses from the drop in Kolon Life's long position.| Tae Kyung vs. AptaBio Therapeutics | Tae Kyung vs. Daewoo SBI SPAC | Tae Kyung vs. Dream Security co | Tae Kyung vs. Microfriend |
| Kolon Life vs. Chin Yang Chemical | Kolon Life vs. Raontech | Kolon Life vs. Orbitech Co | Kolon Life vs. Tae Kyung Chemical |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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