Correlation Between Tae Kyung and KG Eco
Can any of the company-specific risk be diversified away by investing in both Tae Kyung and KG Eco 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 KG Eco 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 KG Eco Technology, you can compare the effects of market volatilities on Tae Kyung and KG Eco 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 KG Eco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tae Kyung and KG Eco.
Diversification Opportunities for Tae Kyung and KG Eco
Weak diversification
The 3 months correlation between Tae and 151860 is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Tae Kyung Chemical and KG Eco Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KG Eco Technology 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 KG Eco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KG Eco Technology has no effect on the direction of Tae Kyung i.e., Tae Kyung and KG Eco go up and down completely randomly.
Pair Corralation between Tae Kyung and KG Eco
Assuming the 90 days trading horizon Tae Kyung is expected to generate 4.48 times less return on investment than KG Eco. But when comparing it to its historical volatility, Tae Kyung Chemical is 1.16 times less risky than KG Eco. It trades about 0.04 of its potential returns per unit of risk. KG Eco Technology is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 483,402 in KG Eco Technology on October 24, 2024 and sell it today you would earn a total of 26,598 from holding KG Eco Technology or generate 5.5% 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. KG Eco Technology
Performance |
| Timeline |
| Tae Kyung Chemical |
| KG Eco Technology |
Tae Kyung and KG Eco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tae Kyung and KG Eco
The main advantage of trading using opposite Tae Kyung and KG Eco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tae Kyung position performs unexpectedly, KG Eco 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 KG Eco will offset losses from the drop in KG Eco's long position.| Tae Kyung vs. KB Financial Group | Tae Kyung vs. Shinhan Financial Group | Tae Kyung vs. Hana Financial | Tae Kyung vs. Woori Financial Group |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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