Correlation Between Tway Air and BIT Computer
Can any of the company-specific risk be diversified away by investing in both Tway Air and BIT Computer 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 BIT Computer 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 BIT Computer Co, you can compare the effects of market volatilities on Tway Air and BIT Computer 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 BIT Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tway Air and BIT Computer.
Diversification Opportunities for Tway Air and BIT Computer
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tway and BIT is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Tway Air Co and BIT Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIT Computer 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 BIT Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIT Computer has no effect on the direction of Tway Air i.e., Tway Air and BIT Computer go up and down completely randomly.
Pair Corralation between Tway Air and BIT Computer
Assuming the 90 days trading horizon Tway Air Co is expected to generate 1.03 times more return on investment than BIT Computer. However, Tway Air is 1.03 times more volatile than BIT Computer Co. It trades about 0.04 of its potential returns per unit of risk. BIT Computer Co is currently generating about 0.0 per unit of risk. If you would invest 224,500 in Tway Air Co on October 16, 2024 and sell it today you would earn a total of 53,000 from holding Tway Air Co or generate 23.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tway Air Co vs. BIT Computer Co
Performance |
| Timeline |
| Tway Air |
| BIT Computer |
Tway Air and BIT Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tway Air and BIT Computer
The main advantage of trading using opposite Tway Air and BIT Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tway Air position performs unexpectedly, BIT Computer 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 BIT Computer will offset losses from the drop in BIT Computer's long position.| Tway Air vs. Korean Reinsurance Co | Tway Air vs. Seoyon Topmetal Co | Tway Air vs. LG Household Healthcare | Tway Air vs. DONGKUK TED METAL |
| BIT Computer vs. Korea Alcohol Industrial | BIT Computer vs. Digital Multimedia Technology | BIT Computer vs. Atinum Investment Co | BIT Computer vs. Barunson Entertainment Arts |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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