Correlation Between Tokai Carbon and Tamul Multimedia
Can any of the company-specific risk be diversified away by investing in both Tokai Carbon and Tamul Multimedia 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 Tokai Carbon and Tamul Multimedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tokai Carbon Korea and Tamul Multimedia Co, you can compare the effects of market volatilities on Tokai Carbon and Tamul Multimedia 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 Tokai Carbon with a short position of Tamul Multimedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tokai Carbon and Tamul Multimedia.
Diversification Opportunities for Tokai Carbon and Tamul Multimedia
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tokai and Tamul is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Tokai Carbon Korea and Tamul Multimedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tamul Multimedia and Tokai Carbon 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 Tokai Carbon Korea are associated (or correlated) with Tamul Multimedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tamul Multimedia has no effect on the direction of Tokai Carbon i.e., Tokai Carbon and Tamul Multimedia go up and down completely randomly.
Pair Corralation between Tokai Carbon and Tamul Multimedia
Assuming the 90 days trading horizon Tokai Carbon Korea is expected to generate 0.7 times more return on investment than Tamul Multimedia. However, Tokai Carbon Korea is 1.43 times less risky than Tamul Multimedia. It trades about -0.22 of its potential returns per unit of risk. Tamul Multimedia Co is currently generating about -0.16 per unit of risk. If you would invest 9,100,000 in Tokai Carbon Korea on August 25, 2024 and sell it today you would lose (1,950,000) from holding Tokai Carbon Korea or give up 21.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tokai Carbon Korea vs. Tamul Multimedia Co
Performance |
| Timeline |
| Tokai Carbon Korea |
| Tamul Multimedia |
Tokai Carbon and Tamul Multimedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tokai Carbon and Tamul Multimedia
The main advantage of trading using opposite Tokai Carbon and Tamul Multimedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tokai Carbon position performs unexpectedly, Tamul Multimedia 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 Tamul Multimedia will offset losses from the drop in Tamul Multimedia's long position.| Tokai Carbon vs. SK Hynix | Tokai Carbon vs. People Technology | Tokai Carbon vs. SIMMTECH Co | Tokai Carbon vs. Haesung DS Co |
| Tamul Multimedia vs. SK Hynix | Tamul Multimedia vs. People Technology | Tamul Multimedia vs. SIMMTECH Co | Tamul Multimedia vs. Haesung DS 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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