Correlation Between INSUN Environmental and TAEYANG
Can any of the company-specific risk be diversified away by investing in both INSUN Environmental and TAEYANG 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 INSUN Environmental and TAEYANG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INSUN Environmental New and TAEYANG, you can compare the effects of market volatilities on INSUN Environmental and TAEYANG 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 INSUN Environmental with a short position of TAEYANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of INSUN Environmental and TAEYANG.
Diversification Opportunities for INSUN Environmental and TAEYANG
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between INSUN and TAEYANG is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding INSUN Environmental New and TAEYANG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAEYANG and INSUN Environmental 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 INSUN Environmental New are associated (or correlated) with TAEYANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAEYANG has no effect on the direction of INSUN Environmental i.e., INSUN Environmental and TAEYANG go up and down completely randomly.
Pair Corralation between INSUN Environmental and TAEYANG
Assuming the 90 days trading horizon INSUN Environmental New is expected to under-perform the TAEYANG. In addition to that, INSUN Environmental is 1.52 times more volatile than TAEYANG. It trades about -0.05 of its total potential returns per unit of risk. TAEYANG is currently generating about -0.02 per unit of volatility. If you would invest 754,569 in TAEYANG on September 26, 2024 and sell it today you would lose (108,569) from holding TAEYANG or give up 14.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
INSUN Environmental New vs. TAEYANG
Performance |
| Timeline |
| INSUN Environmental New |
| TAEYANG |
INSUN Environmental and TAEYANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INSUN Environmental and TAEYANG
The main advantage of trading using opposite INSUN Environmental and TAEYANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INSUN Environmental position performs unexpectedly, TAEYANG 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 TAEYANG will offset losses from the drop in TAEYANG's long position.| INSUN Environmental vs. Korea Environment Technology | INSUN Environmental vs. Paradise Co | INSUN Environmental vs. Seoul Semiconductor Co | INSUN Environmental vs. JUSUNG ENGINEERING Co |
| TAEYANG vs. Heungkuk Metaltech CoLtd | TAEYANG vs. LG Household Healthcare | TAEYANG vs. MetaLabs Co | TAEYANG vs. Daishin Information Communications |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |