Correlation Between Korea Information and Taeyang Metal
Can any of the company-specific risk be diversified away by investing in both Korea Information and Taeyang Metal 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 Information and Taeyang Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Information Communications and Taeyang Metal Industrial, you can compare the effects of market volatilities on Korea Information and Taeyang Metal 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 Information with a short position of Taeyang Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Information and Taeyang Metal.
Diversification Opportunities for Korea Information and Taeyang Metal
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Korea and Taeyang is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Korea Information Communicatio and Taeyang Metal Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taeyang Metal Industrial and Korea Information 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 Information Communications are associated (or correlated) with Taeyang Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taeyang Metal Industrial has no effect on the direction of Korea Information i.e., Korea Information and Taeyang Metal go up and down completely randomly.
Pair Corralation between Korea Information and Taeyang Metal
Assuming the 90 days trading horizon Korea Information Communications is expected to under-perform the Taeyang Metal. But the stock apears to be less risky and, when comparing its historical volatility, Korea Information Communications is 2.06 times less risky than Taeyang Metal. The stock trades about -0.08 of its potential returns per unit of risk. The Taeyang Metal Industrial is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 457,000 in Taeyang Metal Industrial on November 27, 2024 and sell it today you would earn a total of 80,000 from holding Taeyang Metal Industrial or generate 17.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Information Communicatio vs. Taeyang Metal Industrial
Performance |
| Timeline |
| Korea Information |
| Taeyang Metal Industrial |
Korea Information and Taeyang Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Information and Taeyang Metal
The main advantage of trading using opposite Korea Information and Taeyang Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Information position performs unexpectedly, Taeyang Metal 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 Taeyang Metal will offset losses from the drop in Taeyang Metal's long position.| Korea Information vs. Pan Entertainment Co | Korea Information vs. YG Entertainment | Korea Information vs. FNC Entertainment Co | Korea Information vs. Youngsin Metal Industrial |
| Taeyang Metal vs. AptaBio Therapeutics | Taeyang Metal vs. Daewoo SBI SPAC | Taeyang Metal vs. Dream Security co | Taeyang Metal vs. Microfriend |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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