Correlation Between Korea Investment and TJ Media
Can any of the company-specific risk be diversified away by investing in both Korea Investment and TJ Media 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 Korea Investment and TJ Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Investment Holdings and TJ media Co, you can compare the effects of market volatilities on Korea Investment and TJ Media 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 Korea Investment with a short position of TJ Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Investment and TJ Media.
Diversification Opportunities for Korea Investment and TJ Media
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Korea and 032540 is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Korea Investment Holdings and TJ media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TJ media and Korea Investment 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 Korea Investment Holdings are associated (or correlated) with TJ Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TJ media has no effect on the direction of Korea Investment i.e., Korea Investment and TJ Media go up and down completely randomly.
Pair Corralation between Korea Investment and TJ Media
Assuming the 90 days trading horizon Korea Investment Holdings is expected to generate 0.94 times more return on investment than TJ Media. However, Korea Investment Holdings is 1.06 times less risky than TJ Media. It trades about 0.13 of its potential returns per unit of risk. TJ media Co is currently generating about -0.35 per unit of risk. If you would invest 5,280,000 in Korea Investment Holdings on September 2, 2024 and sell it today you would earn a total of 130,000 from holding Korea Investment Holdings or generate 2.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Investment Holdings vs. TJ media Co
Performance |
| Timeline |
| Korea Investment Holdings |
| TJ media |
Korea Investment and TJ Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Investment and TJ Media
The main advantage of trading using opposite Korea Investment and TJ Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Investment position performs unexpectedly, TJ Media 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 TJ Media will offset losses from the drop in TJ Media's long position.| Korea Investment vs. Shinsegae Engineering Construction | Korea Investment vs. Jinro Distillers Co | Korea Investment vs. KEPCO Engineering Construction | Korea Investment vs. Hanshin Construction Co |
| TJ Media vs. LG Display | TJ Media vs. Hyundai Motor Co | TJ Media vs. Hyundai Motor Co | TJ Media vs. Adaptive Plasma Technology |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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