Correlation Between Tway Air and GS Retail
Can any of the company-specific risk be diversified away by investing in both Tway Air and GS Retail 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 GS Retail 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 GS Retail Co, you can compare the effects of market volatilities on Tway Air and GS Retail 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 GS Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tway Air and GS Retail.
Diversification Opportunities for Tway Air and GS Retail
Good diversification
The 3 months correlation between Tway and 007070 is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Tway Air Co and GS Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Retail 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 GS Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Retail has no effect on the direction of Tway Air i.e., Tway Air and GS Retail go up and down completely randomly.
Pair Corralation between Tway Air and GS Retail
Assuming the 90 days trading horizon Tway Air Co is expected to under-perform the GS Retail. In addition to that, Tway Air is 1.47 times more volatile than GS Retail Co. It trades about -0.26 of its total potential returns per unit of risk. GS Retail Co is currently generating about 0.18 per unit of volatility. If you would invest 2,160,000 in GS Retail Co on September 1, 2024 and sell it today you would earn a total of 155,000 from holding GS Retail Co or generate 7.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Tway Air Co vs. GS Retail Co
Performance |
| Timeline |
| Tway Air |
| GS Retail |
Tway Air and GS Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tway Air and GS Retail
The main advantage of trading using opposite Tway Air and GS Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tway Air position performs unexpectedly, GS Retail 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 GS Retail will offset losses from the drop in GS Retail's long position.| Tway Air vs. Hanwha InvestmentSecurities Co | Tway Air vs. EBEST Investment Securities | Tway Air vs. Lindeman Asia Investment | Tway Air vs. E Investment Development |
| GS Retail vs. AptaBio Therapeutics | GS Retail vs. Daewoo SBI SPAC | GS Retail vs. Dream Security co | GS Retail vs. Microfriend |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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