Correlation Between KPX Green and Tae Kyung
Can any of the company-specific risk be diversified away by investing in both KPX Green and Tae Kyung 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 KPX Green and Tae Kyung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KPX Green Chemical and Tae Kyung Chemical, you can compare the effects of market volatilities on KPX Green and Tae Kyung 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 KPX Green with a short position of Tae Kyung. Check out your portfolio center. Please also check ongoing floating volatility patterns of KPX Green and Tae Kyung.
Diversification Opportunities for KPX Green and Tae Kyung
Very weak diversification
The 3 months correlation between KPX and Tae is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding KPX Green Chemical and Tae Kyung Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tae Kyung Chemical and KPX Green 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 KPX Green Chemical are associated (or correlated) with Tae Kyung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tae Kyung Chemical has no effect on the direction of KPX Green i.e., KPX Green and Tae Kyung go up and down completely randomly.
Pair Corralation between KPX Green and Tae Kyung
Assuming the 90 days trading horizon KPX Green Chemical is expected to under-perform the Tae Kyung. In addition to that, KPX Green is 2.33 times more volatile than Tae Kyung Chemical. It trades about -0.08 of its total potential returns per unit of risk. Tae Kyung Chemical is currently generating about -0.04 per unit of volatility. If you would invest 1,124,000 in Tae Kyung Chemical on November 4, 2024 and sell it today you would lose (17,000) from holding Tae Kyung Chemical or give up 1.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KPX Green Chemical vs. Tae Kyung Chemical
Performance |
| Timeline |
| KPX Green Chemical |
| Tae Kyung Chemical |
KPX Green and Tae Kyung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KPX Green and Tae Kyung
The main advantage of trading using opposite KPX Green and Tae Kyung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KPX Green position performs unexpectedly, Tae Kyung 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 Tae Kyung will offset losses from the drop in Tae Kyung's long position.| KPX Green vs. Asiana Airlines | KPX Green vs. Woori Technology Investment | KPX Green vs. Atinum Investment Co | KPX Green vs. Seoul Semiconductor Co |
| Tae Kyung vs. INFINITT Healthcare Co | Tae Kyung vs. Ecoplastic | Tae Kyung vs. Green Cross Medical | Tae Kyung vs. Daejoo Electronic 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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