Correlation Between TJ Media and Daehan Steel
Can any of the company-specific risk be diversified away by investing in both TJ Media and Daehan Steel 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 Daehan Steel 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 Daehan Steel, you can compare the effects of market volatilities on TJ Media and Daehan Steel 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 Daehan Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of TJ Media and Daehan Steel.
Diversification Opportunities for TJ Media and Daehan Steel
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 032540 and Daehan is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding TJ media Co and Daehan Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daehan Steel 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 Daehan Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daehan Steel has no effect on the direction of TJ Media i.e., TJ Media and Daehan Steel go up and down completely randomly.
Pair Corralation between TJ Media and Daehan Steel
Assuming the 90 days trading horizon TJ media Co is expected to under-perform the Daehan Steel. But the stock apears to be less risky and, when comparing its historical volatility, TJ media Co is 2.51 times less risky than Daehan Steel. The stock trades about -0.42 of its potential returns per unit of risk. The Daehan Steel is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,332,000 in Daehan Steel on August 31, 2024 and sell it today you would earn a total of 224,000 from holding Daehan Steel or generate 16.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TJ media Co vs. Daehan Steel
Performance |
| Timeline |
| TJ media |
| Daehan Steel |
TJ Media and Daehan Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TJ Media and Daehan Steel
The main advantage of trading using opposite TJ Media and Daehan Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TJ Media position performs unexpectedly, Daehan Steel 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 Daehan Steel will offset losses from the drop in Daehan Steel's long position.| TJ Media vs. LG Display | TJ Media vs. Hyundai Motor | TJ Media vs. Hyundai Motor Co | TJ Media vs. Hyundai Motor Co |
| Daehan Steel vs. Woori Technology Investment | Daehan Steel vs. Stic Investments | Daehan Steel vs. Hansol Homedeco Co | Daehan Steel vs. Lotte Chilsung Beverage |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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