Correlation Between TJ Media and STI
Can any of the company-specific risk be diversified away by investing in both TJ Media and STI 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 TJ Media and STI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TJ media Co and STI Co, you can compare the effects of market volatilities on TJ Media and STI 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 TJ Media with a short position of STI. Check out your portfolio center. Please also check ongoing floating volatility patterns of TJ Media and STI.
Diversification Opportunities for TJ Media and STI
Poor diversification
The 3 months correlation between 032540 and STI is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding TJ media Co and STI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STI Co and TJ Media 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 TJ media Co are associated (or correlated) with STI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STI Co has no effect on the direction of TJ Media i.e., TJ Media and STI go up and down completely randomly.
Pair Corralation between TJ Media and STI
Assuming the 90 days trading horizon TJ media Co is expected to under-perform the STI. But the stock apears to be less risky and, when comparing its historical volatility, TJ media Co is 2.41 times less risky than STI. The stock trades about -0.03 of its potential returns per unit of risk. The STI Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,280,587 in STI Co on August 27, 2024 and sell it today you would earn a total of 328,413 from holding STI Co or generate 25.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TJ media Co vs. STI Co
Performance |
| Timeline |
| TJ media |
| STI Co |
TJ Media and STI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TJ Media and STI
The main advantage of trading using opposite TJ Media and STI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TJ Media position performs unexpectedly, STI 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 STI will offset losses from the drop in STI's long position.| TJ Media vs. Daehan Steel | TJ Media vs. Samyang Foods Co | TJ Media vs. Miwon Chemical | TJ Media vs. Jinro Distillers Co |
| STI vs. TJ media Co | STI vs. Korea Computer | STI vs. SKONEC Entertainment Co | STI vs. FNC Entertainment 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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