Correlation Between Tae Kyung and Organic Special
Can any of the company-specific risk be diversified away by investing in both Tae Kyung and Organic Special 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 Organic Special 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 Organic Special Pet, you can compare the effects of market volatilities on Tae Kyung and Organic Special 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 Organic Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tae Kyung and Organic Special.
Diversification Opportunities for Tae Kyung and Organic Special
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tae and Organic is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Tae Kyung Chemical and Organic Special Pet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Organic Special Pet 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 Organic Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Organic Special Pet has no effect on the direction of Tae Kyung i.e., Tae Kyung and Organic Special go up and down completely randomly.
Pair Corralation between Tae Kyung and Organic Special
Assuming the 90 days trading horizon Tae Kyung Chemical is expected to generate 0.69 times more return on investment than Organic Special. However, Tae Kyung Chemical is 1.46 times less risky than Organic Special. It trades about 0.07 of its potential returns per unit of risk. Organic Special Pet is currently generating about -0.22 per unit of risk. If you would invest 1,080,000 in Tae Kyung Chemical on August 31, 2024 and sell it today you would earn a total of 20,000 from holding Tae Kyung Chemical or generate 1.85% 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. Organic Special Pet
Performance |
| Timeline |
| Tae Kyung Chemical |
| Organic Special Pet |
Tae Kyung and Organic Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tae Kyung and Organic Special
The main advantage of trading using opposite Tae Kyung and Organic Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tae Kyung position performs unexpectedly, Organic Special 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 Organic Special will offset losses from the drop in Organic Special's long position.| Tae Kyung vs. Semyung Electric Machinery | Tae Kyung vs. Dongwoo Farm To | Tae Kyung vs. Hanshin Construction Co | Tae Kyung vs. Daedong Metals Co |
| Organic Special vs. Samsung Electronics Co | Organic Special vs. Samsung Electronics Co | Organic Special vs. LG Energy Solution | Organic Special vs. SK Hynix |
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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