Correlation Between Tae Kyung and Alton Sports
Can any of the company-specific risk be diversified away by investing in both Tae Kyung and Alton Sports 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 Alton Sports 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 Alton Sports CoLtd, you can compare the effects of market volatilities on Tae Kyung and Alton Sports 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 Alton Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tae Kyung and Alton Sports.
Diversification Opportunities for Tae Kyung and Alton Sports
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tae and Alton is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Tae Kyung Chemical and Alton Sports CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alton Sports CoLtd 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 Alton Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alton Sports CoLtd has no effect on the direction of Tae Kyung i.e., Tae Kyung and Alton Sports go up and down completely randomly.
Pair Corralation between Tae Kyung and Alton Sports
Assuming the 90 days trading horizon Tae Kyung Chemical is expected to under-perform the Alton Sports. In addition to that, Tae Kyung is 1.83 times more volatile than Alton Sports CoLtd. It trades about -0.03 of its total potential returns per unit of risk. Alton Sports CoLtd is currently generating about 0.33 per unit of volatility. If you would invest 145,300 in Alton Sports CoLtd on November 7, 2024 and sell it today you would earn a total of 8,700 from holding Alton Sports CoLtd or generate 5.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Tae Kyung Chemical vs. Alton Sports CoLtd
Performance |
| Timeline |
| Tae Kyung Chemical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Alton Sports CoLtd |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Tae Kyung and Alton Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tae Kyung and Alton Sports
The main advantage of trading using opposite Tae Kyung and Alton Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tae Kyung position performs unexpectedly, Alton Sports 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 Alton Sports will offset losses from the drop in Alton Sports' long position.| Tae Kyung vs. A Tech Solution Co | Tae Kyung vs. Hotel Shilla Co | Tae Kyung vs. Shinhan Inverse Copper | Tae Kyung vs. Orbitech Co |
| Alton Sports vs. Korea Plasma Technology | Alton Sports vs. Daou Technology | Alton Sports vs. Vina Technology Co | Alton Sports vs. Woori Technology |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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