Correlation Between Tway Air and Bosung Power
Can any of the company-specific risk be diversified away by investing in both Tway Air and Bosung Power 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 Tway Air and Bosung Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tway Air Co and Bosung Power Technology, you can compare the effects of market volatilities on Tway Air and Bosung Power 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 Tway Air with a short position of Bosung Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tway Air and Bosung Power.
Diversification Opportunities for Tway Air and Bosung Power
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tway and Bosung is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Tway Air Co and Bosung Power Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bosung Power Technology and Tway Air 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 Tway Air Co are associated (or correlated) with Bosung Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bosung Power Technology has no effect on the direction of Tway Air i.e., Tway Air and Bosung Power go up and down completely randomly.
Pair Corralation between Tway Air and Bosung Power
Assuming the 90 days trading horizon Tway Air Co is expected to generate 1.38 times more return on investment than Bosung Power. However, Tway Air is 1.38 times more volatile than Bosung Power Technology. It trades about 0.22 of its potential returns per unit of risk. Bosung Power Technology is currently generating about 0.07 per unit of risk. If you would invest 294,500 in Tway Air Co on October 30, 2024 and sell it today you would earn a total of 116,500 from holding Tway Air Co or generate 39.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tway Air Co vs. Bosung Power Technology
Performance |
| Timeline |
| Tway Air |
| Bosung Power Technology |
Tway Air and Bosung Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tway Air and Bosung Power
The main advantage of trading using opposite Tway Air and Bosung Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tway Air position performs unexpectedly, Bosung Power 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 Bosung Power will offset losses from the drop in Bosung Power's long position.| Tway Air vs. Namhae Chemical | Tway Air vs. Lotte Non Life Insurance | Tway Air vs. KPX Green Chemical | Tway Air vs. Youngchang Chemical Co |
| Bosung Power vs. TJ media Co | Bosung Power vs. SKONEC Entertainment Co | Bosung Power vs. Samlip General Foods | Bosung Power vs. MEDIANA CoLtd |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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