Correlation Between Tway Air and Sambo Corrugated
Can any of the company-specific risk be diversified away by investing in both Tway Air and Sambo Corrugated 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 Sambo Corrugated 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 Sambo Corrugated Board, you can compare the effects of market volatilities on Tway Air and Sambo Corrugated 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 Sambo Corrugated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tway Air and Sambo Corrugated.
Diversification Opportunities for Tway Air and Sambo Corrugated
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tway and Sambo is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Tway Air Co and Sambo Corrugated Board in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sambo Corrugated Board 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 Sambo Corrugated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sambo Corrugated Board has no effect on the direction of Tway Air i.e., Tway Air and Sambo Corrugated go up and down completely randomly.
Pair Corralation between Tway Air and Sambo Corrugated
Assuming the 90 days trading horizon Tway Air Co is expected to generate 5.01 times more return on investment than Sambo Corrugated. However, Tway Air is 5.01 times more volatile than Sambo Corrugated Board. It trades about 0.49 of its potential returns per unit of risk. Sambo Corrugated Board is currently generating about -0.13 per unit of risk. If you would invest 252,000 in Tway Air Co on October 24, 2024 and sell it today you would earn a total of 84,000 from holding Tway Air Co or generate 33.33% 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. Sambo Corrugated Board
Performance |
| Timeline |
| Tway Air |
| Sambo Corrugated Board |
Tway Air and Sambo Corrugated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tway Air and Sambo Corrugated
The main advantage of trading using opposite Tway Air and Sambo Corrugated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tway Air position performs unexpectedly, Sambo Corrugated 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 Sambo Corrugated will offset losses from the drop in Sambo Corrugated's long position.| Tway Air vs. Solus Advanced Materials | Tway Air vs. Seoyon Topmetal Co | Tway Air vs. LAKE MATERIALS LTD | Tway Air vs. Union Materials Corp |
| Sambo Corrugated vs. LAKE MATERIALS LTD | Sambo Corrugated vs. Tae Kyung Chemical | Sambo Corrugated vs. Shinhan Inverse Silver | Sambo Corrugated vs. RF Materials 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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