Correlation Between Tae Kyung and Innometry
Can any of the company-specific risk be diversified away by investing in both Tae Kyung and Innometry 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 Innometry 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 Innometry Co, you can compare the effects of market volatilities on Tae Kyung and Innometry 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 Innometry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tae Kyung and Innometry.
Diversification Opportunities for Tae Kyung and Innometry
Very good diversification
The 3 months correlation between Tae and Innometry is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Tae Kyung Chemical and Innometry Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innometry 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 Innometry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innometry has no effect on the direction of Tae Kyung i.e., Tae Kyung and Innometry go up and down completely randomly.
Pair Corralation between Tae Kyung and Innometry
Assuming the 90 days trading horizon Tae Kyung is expected to generate 3.6 times less return on investment than Innometry. In addition to that, Tae Kyung is 1.11 times more volatile than Innometry Co. It trades about 0.02 of its total potential returns per unit of risk. Innometry Co is currently generating about 0.07 per unit of volatility. If you would invest 717,000 in Innometry Co on October 29, 2024 and sell it today you would earn a total of 13,000 from holding Innometry Co or generate 1.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tae Kyung Chemical vs. Innometry Co
Performance |
| Timeline |
| Tae Kyung Chemical |
| Innometry |
Tae Kyung and Innometry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tae Kyung and Innometry
The main advantage of trading using opposite Tae Kyung and Innometry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tae Kyung position performs unexpectedly, Innometry 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 Innometry will offset losses from the drop in Innometry's long position.| Tae Kyung vs. Nh Investment And | Tae Kyung vs. Jeju Air Co | Tae Kyung vs. Stic Investments | Tae Kyung vs. Korean Reinsurance Co |
| Innometry vs. LEENO Industrial | Innometry vs. Air Busan Co | Innometry vs. Korea Industrial Co | Innometry vs. Pyung Hwa Industrial |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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