Correlation Between Elentec and TSI
Can any of the company-specific risk be diversified away by investing in both Elentec and TSI 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 Elentec and TSI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elentec Co and TSI Co, you can compare the effects of market volatilities on Elentec and TSI 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 Elentec with a short position of TSI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elentec and TSI.
Diversification Opportunities for Elentec and TSI
Almost no diversification
The 3 months correlation between Elentec and TSI is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Elentec Co and TSI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TSI Co and Elentec 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 Elentec Co are associated (or correlated) with TSI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TSI Co has no effect on the direction of Elentec i.e., Elentec and TSI go up and down completely randomly.
Pair Corralation between Elentec and TSI
Assuming the 90 days trading horizon Elentec Co is expected to under-perform the TSI. But the stock apears to be less risky and, when comparing its historical volatility, Elentec Co is 1.11 times less risky than TSI. The stock trades about -0.04 of its potential returns per unit of risk. The TSI Co is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 953,000 in TSI Co on September 2, 2024 and sell it today you would lose (427,000) from holding TSI Co or give up 44.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elentec Co vs. TSI Co
Performance |
| Timeline |
| Elentec |
| TSI Co |
Elentec and TSI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elentec and TSI
The main advantage of trading using opposite Elentec and TSI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elentec position performs unexpectedly, TSI 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 TSI will offset losses from the drop in TSI's long position.| Elentec vs. Korea New Network | Elentec vs. ICD Co | Elentec vs. DYPNF CoLtd | Elentec vs. Busan Industrial 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |