Correlation Between TJ Media and Sewoon Medical
Can any of the company-specific risk be diversified away by investing in both TJ Media and Sewoon Medical 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 Sewoon Medical 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 Sewoon Medical Co, you can compare the effects of market volatilities on TJ Media and Sewoon Medical 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 Sewoon Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of TJ Media and Sewoon Medical.
Diversification Opportunities for TJ Media and Sewoon Medical
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 032540 and Sewoon is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding TJ media Co and Sewoon Medical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sewoon Medical 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 Sewoon Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sewoon Medical has no effect on the direction of TJ Media i.e., TJ Media and Sewoon Medical go up and down completely randomly.
Pair Corralation between TJ Media and Sewoon Medical
Assuming the 90 days trading horizon TJ media Co is expected to under-perform the Sewoon Medical. But the stock apears to be less risky and, when comparing its historical volatility, TJ media Co is 1.52 times less risky than Sewoon Medical. The stock trades about -0.42 of its potential returns per unit of risk. The Sewoon Medical Co is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 272,000 in Sewoon Medical Co on September 1, 2024 and sell it today you would lose (18,000) from holding Sewoon Medical Co or give up 6.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
TJ media Co vs. Sewoon Medical Co
Performance |
| Timeline |
| TJ media |
| Sewoon Medical |
TJ Media and Sewoon Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TJ Media and Sewoon Medical
The main advantage of trading using opposite TJ Media and Sewoon Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TJ Media position performs unexpectedly, Sewoon Medical 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 Sewoon Medical will offset losses from the drop in Sewoon Medical'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 |
| Sewoon Medical vs. Infinitt Healthcare Co | Sewoon Medical vs. PLAYWITH | Sewoon Medical vs. CKH Food Health | Sewoon Medical vs. Samhwa Paint Industrial |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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