Correlation Between Tway Air and EBEST Investment
Can any of the company-specific risk be diversified away by investing in both Tway Air and EBEST Investment 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 EBEST Investment 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 EBEST Investment Securities, you can compare the effects of market volatilities on Tway Air and EBEST Investment 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 EBEST Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tway Air and EBEST Investment.
Diversification Opportunities for Tway Air and EBEST Investment
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tway and EBEST is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Tway Air Co and EBEST Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBEST Investment Sec 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 EBEST Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EBEST Investment Sec has no effect on the direction of Tway Air i.e., Tway Air and EBEST Investment go up and down completely randomly.
Pair Corralation between Tway Air and EBEST Investment
Assuming the 90 days trading horizon Tway Air Co is expected to generate 1.52 times more return on investment than EBEST Investment. However, Tway Air is 1.52 times more volatile than EBEST Investment Securities. It trades about 0.01 of its potential returns per unit of risk. EBEST Investment Securities is currently generating about 0.01 per unit of risk. If you would invest 314,500 in Tway Air Co on August 28, 2024 and sell it today you would lose (20,000) from holding Tway Air Co or give up 6.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tway Air Co vs. EBEST Investment Securities
Performance |
| Timeline |
| Tway Air |
| EBEST Investment Sec |
Tway Air and EBEST Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tway Air and EBEST Investment
The main advantage of trading using opposite Tway Air and EBEST Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tway Air position performs unexpectedly, EBEST Investment 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 EBEST Investment will offset losses from the drop in EBEST Investment's long position.| Tway Air vs. Busan Industrial Co | Tway Air vs. Busan Ind | Tway Air vs. Mirae Asset Daewoo | Tway Air vs. UNISEM Co |
| EBEST Investment vs. DB Insurance Co | EBEST Investment vs. KakaoBank Corp | EBEST Investment vs. Pyung Hwa Industrial | EBEST Investment vs. Daiyang Metal 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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