Correlation Between Tae Kyung and Miwon Chemical
Can any of the company-specific risk be diversified away by investing in both Tae Kyung and Miwon Chemical 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 Miwon Chemical 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 Miwon Chemical, you can compare the effects of market volatilities on Tae Kyung and Miwon Chemical 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 Miwon Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tae Kyung and Miwon Chemical.
Diversification Opportunities for Tae Kyung and Miwon Chemical
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tae and Miwon is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Tae Kyung Chemical and Miwon Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miwon Chemical 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 Miwon Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miwon Chemical has no effect on the direction of Tae Kyung i.e., Tae Kyung and Miwon Chemical go up and down completely randomly.
Pair Corralation between Tae Kyung and Miwon Chemical
Assuming the 90 days trading horizon Tae Kyung Chemical is expected to generate 1.61 times more return on investment than Miwon Chemical. However, Tae Kyung is 1.61 times more volatile than Miwon Chemical. It trades about 0.01 of its potential returns per unit of risk. Miwon Chemical is currently generating about -0.15 per unit of risk. If you would invest 1,095,000 in Tae Kyung Chemical on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Tae Kyung Chemical or generate 0.0% 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. Miwon Chemical
Performance |
| Timeline |
| Tae Kyung Chemical |
| Miwon Chemical |
Tae Kyung and Miwon Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tae Kyung and Miwon Chemical
The main advantage of trading using opposite Tae Kyung and Miwon Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tae Kyung position performs unexpectedly, Miwon Chemical 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 Miwon Chemical will offset losses from the drop in Miwon Chemical'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 |
| Miwon Chemical vs. Homecast CoLtd | Miwon Chemical vs. Hankukpackage Co | Miwon Chemical vs. Sam Yang Foods | Miwon Chemical vs. Polaris Office Corp |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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