Correlation Between Kyung Chang and TES
Can any of the company-specific risk be diversified away by investing in both Kyung Chang and TES 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 Kyung Chang and TES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kyung Chang Industrial and TES Co, you can compare the effects of market volatilities on Kyung Chang and TES 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 Kyung Chang with a short position of TES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyung Chang and TES.
Diversification Opportunities for Kyung Chang and TES
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kyung and TES is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Kyung Chang Industrial and TES Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TES Co and Kyung Chang 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 Kyung Chang Industrial are associated (or correlated) with TES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TES Co has no effect on the direction of Kyung Chang i.e., Kyung Chang and TES go up and down completely randomly.
Pair Corralation between Kyung Chang and TES
Assuming the 90 days trading horizon Kyung Chang Industrial is expected to generate 1.15 times more return on investment than TES. However, Kyung Chang is 1.15 times more volatile than TES Co. It trades about 0.02 of its potential returns per unit of risk. TES Co is currently generating about 0.01 per unit of risk. If you would invest 207,000 in Kyung Chang Industrial on August 30, 2024 and sell it today you would lose (3,000) from holding Kyung Chang Industrial or give up 1.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kyung Chang Industrial vs. TES Co
Performance |
| Timeline |
| Kyung Chang Industrial |
| TES Co |
Kyung Chang and TES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kyung Chang and TES
The main advantage of trading using opposite Kyung Chang and TES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyung Chang position performs unexpectedly, TES 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 TES will offset losses from the drop in TES's long position.| Kyung Chang vs. Kisan Telecom Co | Kyung Chang vs. Seohee Construction Co | Kyung Chang vs. Nable Communications | Kyung Chang vs. Hanshin Construction 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |