Correlation Between TJ Media and Kaonmedia
Can any of the company-specific risk be diversified away by investing in both TJ Media and Kaonmedia 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 Kaonmedia 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 Kaonmedia Co, you can compare the effects of market volatilities on TJ Media and Kaonmedia 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 Kaonmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of TJ Media and Kaonmedia.
Diversification Opportunities for TJ Media and Kaonmedia
Poor diversification
The 3 months correlation between 032540 and Kaonmedia is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding TJ media Co and Kaonmedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaonmedia 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 Kaonmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaonmedia has no effect on the direction of TJ Media i.e., TJ Media and Kaonmedia go up and down completely randomly.
Pair Corralation between TJ Media and Kaonmedia
Assuming the 90 days trading horizon TJ media Co is expected to under-perform the Kaonmedia. But the stock apears to be less risky and, when comparing its historical volatility, TJ media Co is 3.26 times less risky than Kaonmedia. The stock trades about -0.36 of its potential returns per unit of risk. The Kaonmedia Co is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 359,000 in Kaonmedia Co on August 27, 2024 and sell it today you would lose (24,000) from holding Kaonmedia Co or give up 6.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TJ media Co vs. Kaonmedia Co
Performance |
| Timeline |
| TJ media |
| Kaonmedia |
TJ Media and Kaonmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TJ Media and Kaonmedia
The main advantage of trading using opposite TJ Media and Kaonmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TJ Media position performs unexpectedly, Kaonmedia 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 Kaonmedia will offset losses from the drop in Kaonmedia'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 |
| Kaonmedia vs. Korea Real Estate | Kaonmedia vs. Korea Ratings Co | Kaonmedia vs. IQuest Co | Kaonmedia vs. Wonbang Tech 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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