Correlation Between Tuksu Engineering and Daewoo Engineering
Can any of the company-specific risk be diversified away by investing in both Tuksu Engineering and Daewoo Engineering 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 Tuksu Engineering and Daewoo Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tuksu Engineering ConstructionLtd and Daewoo Engineering Construction, you can compare the effects of market volatilities on Tuksu Engineering and Daewoo Engineering 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 Tuksu Engineering with a short position of Daewoo Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tuksu Engineering and Daewoo Engineering.
Diversification Opportunities for Tuksu Engineering and Daewoo Engineering
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tuksu and Daewoo is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Tuksu Engineering Construction and Daewoo Engineering Constructio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewoo Engineering and Tuksu Engineering 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 Tuksu Engineering ConstructionLtd are associated (or correlated) with Daewoo Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewoo Engineering has no effect on the direction of Tuksu Engineering i.e., Tuksu Engineering and Daewoo Engineering go up and down completely randomly.
Pair Corralation between Tuksu Engineering and Daewoo Engineering
Assuming the 90 days trading horizon Tuksu Engineering ConstructionLtd is expected to under-perform the Daewoo Engineering. In addition to that, Tuksu Engineering is 1.44 times more volatile than Daewoo Engineering Construction. It trades about -0.02 of its total potential returns per unit of risk. Daewoo Engineering Construction is currently generating about -0.02 per unit of volatility. If you would invest 421,000 in Daewoo Engineering Construction on September 1, 2024 and sell it today you would lose (52,000) from holding Daewoo Engineering Construction or give up 12.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tuksu Engineering Construction vs. Daewoo Engineering Constructio
Performance |
| Timeline |
| Tuksu Engineering |
| Daewoo Engineering |
Tuksu Engineering and Daewoo Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tuksu Engineering and Daewoo Engineering
The main advantage of trading using opposite Tuksu Engineering and Daewoo Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tuksu Engineering position performs unexpectedly, Daewoo Engineering 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 Daewoo Engineering will offset losses from the drop in Daewoo Engineering's long position.| Tuksu Engineering vs. Korea New Network | Tuksu Engineering vs. ICD Co | Tuksu Engineering vs. DYPNF CoLtd | Tuksu Engineering vs. Busan Industrial Co |
| Daewoo Engineering vs. Korea New Network | Daewoo Engineering vs. ICD Co | Daewoo Engineering vs. DYPNF CoLtd | Daewoo Engineering vs. Busan Industrial 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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