Correlation Between TAEYANG and Sejong Telecom
Can any of the company-specific risk be diversified away by investing in both TAEYANG and Sejong Telecom 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 TAEYANG and Sejong Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TAEYANG and Sejong Telecom, you can compare the effects of market volatilities on TAEYANG and Sejong Telecom 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 TAEYANG with a short position of Sejong Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of TAEYANG and Sejong Telecom.
Diversification Opportunities for TAEYANG and Sejong Telecom
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between TAEYANG and Sejong is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding TAEYANG and Sejong Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sejong Telecom and TAEYANG 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 TAEYANG are associated (or correlated) with Sejong Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sejong Telecom has no effect on the direction of TAEYANG i.e., TAEYANG and Sejong Telecom go up and down completely randomly.
Pair Corralation between TAEYANG and Sejong Telecom
Assuming the 90 days trading horizon TAEYANG is expected to generate 0.98 times more return on investment than Sejong Telecom. However, TAEYANG is 1.02 times less risky than Sejong Telecom. It trades about 0.08 of its potential returns per unit of risk. Sejong Telecom is currently generating about -0.11 per unit of risk. If you would invest 567,748 in TAEYANG on December 10, 2024 and sell it today you would earn a total of 67,252 from holding TAEYANG or generate 11.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TAEYANG vs. Sejong Telecom
Performance |
| Timeline |
| TAEYANG |
| Sejong Telecom |
TAEYANG and Sejong Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TAEYANG and Sejong Telecom
The main advantage of trading using opposite TAEYANG and Sejong Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TAEYANG position performs unexpectedly, Sejong Telecom 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 Sejong Telecom will offset losses from the drop in Sejong Telecom's long position.| TAEYANG vs. Aprogen Healthcare Games | TAEYANG vs. INNOX Advanced Materials | TAEYANG vs. LG Household Healthcare | TAEYANG vs. Daejoo Electronic Materials |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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