Correlation Between INtRON Biotechnology and TK Chemical
Can any of the company-specific risk be diversified away by investing in both INtRON Biotechnology and TK Chemical 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 INtRON Biotechnology and TK Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iNtRON Biotechnology and TK Chemical, you can compare the effects of market volatilities on INtRON Biotechnology and TK Chemical 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 INtRON Biotechnology with a short position of TK Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of INtRON Biotechnology and TK Chemical.
Diversification Opportunities for INtRON Biotechnology and TK Chemical
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between INtRON and 104480 is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding iNtRON Biotechnology and TK Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TK Chemical and INtRON Biotechnology 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 iNtRON Biotechnology are associated (or correlated) with TK Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TK Chemical has no effect on the direction of INtRON Biotechnology i.e., INtRON Biotechnology and TK Chemical go up and down completely randomly.
Pair Corralation between INtRON Biotechnology and TK Chemical
Assuming the 90 days trading horizon iNtRON Biotechnology is expected to generate 1.66 times more return on investment than TK Chemical. However, INtRON Biotechnology is 1.66 times more volatile than TK Chemical. It trades about 0.0 of its potential returns per unit of risk. TK Chemical is currently generating about -0.06 per unit of risk. If you would invest 742,000 in iNtRON Biotechnology on August 31, 2024 and sell it today you would lose (198,000) from holding iNtRON Biotechnology or give up 26.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.72% |
| Values | Daily Returns |
iNtRON Biotechnology vs. TK Chemical
Performance |
| Timeline |
| iNtRON Biotechnology |
| TK Chemical |
INtRON Biotechnology and TK Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INtRON Biotechnology and TK Chemical
The main advantage of trading using opposite INtRON Biotechnology and TK Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INtRON Biotechnology position performs unexpectedly, TK Chemical 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 TK Chemical will offset losses from the drop in TK Chemical's long position.| INtRON Biotechnology vs. AptaBio Therapeutics | INtRON Biotechnology vs. KT Hitel | INtRON Biotechnology vs. SillaJen | INtRON Biotechnology vs. Cytogen |
| TK Chemical vs. LG Display | TK Chemical vs. Hyundai Motor | TK Chemical vs. Hyundai Motor Co | TK Chemical vs. Hyundai Motor 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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