Correlation Between Korea Alcohol and TK Chemical
Can any of the company-specific risk be diversified away by investing in both Korea Alcohol and TK 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 Korea Alcohol and TK Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Alcohol Industrial and TK Chemical, you can compare the effects of market volatilities on Korea Alcohol and TK 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 Korea Alcohol with a short position of TK Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Alcohol and TK Chemical.
Diversification Opportunities for Korea Alcohol and TK Chemical
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Korea and 104480 is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Korea Alcohol Industrial and TK Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TK Chemical and Korea Alcohol 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 Korea Alcohol Industrial are associated (or correlated) with TK Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TK Chemical has no effect on the direction of Korea Alcohol i.e., Korea Alcohol and TK Chemical go up and down completely randomly.
Pair Corralation between Korea Alcohol and TK Chemical
Assuming the 90 days trading horizon Korea Alcohol Industrial is expected to generate 0.86 times more return on investment than TK Chemical. However, Korea Alcohol Industrial is 1.17 times less risky than TK Chemical. It trades about 0.0 of its potential returns per unit of risk. TK Chemical is currently generating about -0.04 per unit of risk. If you would invest 1,016,673 in Korea Alcohol Industrial on October 18, 2024 and sell it today you would lose (160,673) from holding Korea Alcohol Industrial or give up 15.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Korea Alcohol Industrial vs. TK Chemical
Performance |
| Timeline |
| Korea Alcohol Industrial |
| TK Chemical |
Korea Alcohol and TK Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Alcohol and TK Chemical
The main advantage of trading using opposite Korea Alcohol and TK Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Alcohol position performs unexpectedly, TK 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 TK Chemical will offset losses from the drop in TK Chemical's long position.| Korea Alcohol vs. Seoul Electronics Telecom | Korea Alcohol vs. Dongkuk Structures Construction | Korea Alcohol vs. Daeduck Electronics Co | Korea Alcohol vs. Shinil Electronics Co |
| TK Chemical vs. Hankook Steel Co | TK Chemical vs. Insun Environment New | TK Chemical vs. Samhyun Steel Co | TK Chemical vs. Jinro Distillers 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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