Correlation Between Tae Kyung and PlayD
Can any of the company-specific risk be diversified away by investing in both Tae Kyung and PlayD 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 PlayD 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 PlayD Co, you can compare the effects of market volatilities on Tae Kyung and PlayD 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 PlayD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tae Kyung and PlayD.
Diversification Opportunities for Tae Kyung and PlayD
Average diversification
The 3 months correlation between Tae and PlayD is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Tae Kyung Chemical and PlayD Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PlayD 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 PlayD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PlayD has no effect on the direction of Tae Kyung i.e., Tae Kyung and PlayD go up and down completely randomly.
Pair Corralation between Tae Kyung and PlayD
Assuming the 90 days trading horizon Tae Kyung Chemical is expected to generate 0.33 times more return on investment than PlayD. However, Tae Kyung Chemical is 3.0 times less risky than PlayD. It trades about 0.01 of its potential returns per unit of risk. PlayD Co is currently generating about -0.07 per unit of risk. If you would invest 1,095,000 in Tae Kyung Chemical on August 29, 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tae Kyung Chemical vs. PlayD Co
Performance |
| Timeline |
| Tae Kyung Chemical |
| PlayD |
Tae Kyung and PlayD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tae Kyung and PlayD
The main advantage of trading using opposite Tae Kyung and PlayD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tae Kyung position performs unexpectedly, PlayD 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 PlayD will offset losses from the drop in PlayD'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 |
| PlayD vs. Daishin Information Communications | PlayD vs. Dongbang Transport Logistics | PlayD vs. Sangsin Energy Display | PlayD vs. PJ Metal 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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