Correlation Between Taegu Broadcasting and InnoTherapy
Can any of the company-specific risk be diversified away by investing in both Taegu Broadcasting and InnoTherapy 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 Taegu Broadcasting and InnoTherapy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taegu Broadcasting and InnoTherapy, you can compare the effects of market volatilities on Taegu Broadcasting and InnoTherapy 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 Taegu Broadcasting with a short position of InnoTherapy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taegu Broadcasting and InnoTherapy.
Diversification Opportunities for Taegu Broadcasting and InnoTherapy
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Taegu and InnoTherapy is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Taegu Broadcasting and InnoTherapy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InnoTherapy and Taegu Broadcasting 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 Taegu Broadcasting are associated (or correlated) with InnoTherapy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InnoTherapy has no effect on the direction of Taegu Broadcasting i.e., Taegu Broadcasting and InnoTherapy go up and down completely randomly.
Pair Corralation between Taegu Broadcasting and InnoTherapy
Assuming the 90 days trading horizon Taegu Broadcasting is expected to generate 1.37 times more return on investment than InnoTherapy. However, Taegu Broadcasting is 1.37 times more volatile than InnoTherapy. It trades about -0.1 of its potential returns per unit of risk. InnoTherapy is currently generating about -0.46 per unit of risk. If you would invest 84,300 in Taegu Broadcasting on November 28, 2024 and sell it today you would lose (3,300) from holding Taegu Broadcasting or give up 3.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taegu Broadcasting vs. InnoTherapy
Performance |
| Timeline |
| Taegu Broadcasting |
| InnoTherapy |
Taegu Broadcasting and InnoTherapy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taegu Broadcasting and InnoTherapy
The main advantage of trading using opposite Taegu Broadcasting and InnoTherapy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taegu Broadcasting position performs unexpectedly, InnoTherapy 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 InnoTherapy will offset losses from the drop in InnoTherapy's long position.| Taegu Broadcasting vs. Lotte Data Communication | Taegu Broadcasting vs. Daishin Information Communications | Taegu Broadcasting vs. Nable Communications | Taegu Broadcasting vs. LG Household Healthcare |
| InnoTherapy vs. Daishin Information Communications | InnoTherapy vs. Hannong Chemicals | InnoTherapy vs. Korea Information Communications | InnoTherapy vs. Hanmi Semiconductor 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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