Correlation Between Tokai Carbon and CG Hi
Can any of the company-specific risk be diversified away by investing in both Tokai Carbon and CG Hi 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 CG Hi 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 CG Hi Tech, you can compare the effects of market volatilities on Tokai Carbon and CG Hi 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 CG Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tokai Carbon and CG Hi.
Diversification Opportunities for Tokai Carbon and CG Hi
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tokai and 264660 is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Tokai Carbon Korea and CG Hi Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CG Hi Tech 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 CG Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CG Hi Tech has no effect on the direction of Tokai Carbon i.e., Tokai Carbon and CG Hi go up and down completely randomly.
Pair Corralation between Tokai Carbon and CG Hi
Assuming the 90 days trading horizon Tokai Carbon is expected to generate 8.47 times less return on investment than CG Hi. But when comparing it to its historical volatility, Tokai Carbon Korea is 2.1 times less risky than CG Hi. It trades about 0.03 of its potential returns per unit of risk. CG Hi Tech is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,009,901 in CG Hi Tech on October 19, 2024 and sell it today you would earn a total of 167,099 from holding CG Hi Tech or generate 16.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tokai Carbon Korea vs. CG Hi Tech
Performance |
| Timeline |
| Tokai Carbon Korea |
| CG Hi Tech |
Tokai Carbon and CG Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tokai Carbon and CG Hi
The main advantage of trading using opposite Tokai Carbon and CG Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tokai Carbon position performs unexpectedly, CG Hi 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 CG Hi will offset losses from the drop in CG Hi's long position.| Tokai Carbon vs. LEENO Industrial | Tokai Carbon vs. Wonik Ips Co | Tokai Carbon vs. Dongjin Semichem Co | Tokai Carbon vs. Hana 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |