Correlation Between Tway Air and Kyeryong Construction
Can any of the company-specific risk be diversified away by investing in both Tway Air and Kyeryong Construction 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 Kyeryong Construction 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 Kyeryong Construction Industrial, you can compare the effects of market volatilities on Tway Air and Kyeryong Construction 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 Kyeryong Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tway Air and Kyeryong Construction.
Diversification Opportunities for Tway Air and Kyeryong Construction
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tway and Kyeryong is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Tway Air Co and Kyeryong Construction Industri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyeryong Construction 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 Kyeryong Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyeryong Construction has no effect on the direction of Tway Air i.e., Tway Air and Kyeryong Construction go up and down completely randomly.
Pair Corralation between Tway Air and Kyeryong Construction
Assuming the 90 days trading horizon Tway Air Co is expected to generate 2.03 times more return on investment than Kyeryong Construction. However, Tway Air is 2.03 times more volatile than Kyeryong Construction Industrial. It trades about 0.04 of its potential returns per unit of risk. Kyeryong Construction Industrial is currently generating about -0.1 per unit of risk. If you would invest 271,000 in Tway Air Co on October 14, 2024 and sell it today you would earn a total of 3,500 from holding Tway Air Co or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tway Air Co vs. Kyeryong Construction Industri
Performance |
| Timeline |
| Tway Air |
| Kyeryong Construction |
Tway Air and Kyeryong Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tway Air and Kyeryong Construction
The main advantage of trading using opposite Tway Air and Kyeryong Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tway Air position performs unexpectedly, Kyeryong Construction 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 Kyeryong Construction will offset losses from the drop in Kyeryong Construction's long position.| Tway Air vs. SBI Investment KOREA | Tway Air vs. LG Chemicals | Tway Air vs. Hotel Shilla Co | Tway Air vs. Daelim Trading Co |
| Kyeryong Construction vs. Alton Sports CoLtd | Kyeryong Construction vs. PLAYWITH | Kyeryong Construction vs. Korean Drug Co | Kyeryong Construction vs. Display Tech Co |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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