Correlation Between Tway Air and SEOJEON ELECTRIC
Can any of the company-specific risk be diversified away by investing in both Tway Air and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC 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 SEOJEON ELECTRIC MACHINERY, you can compare the effects of market volatilities on Tway Air and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tway Air and SEOJEON ELECTRIC.
Diversification Opportunities for Tway Air and SEOJEON ELECTRIC
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tway and SEOJEON is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Tway Air Co and SEOJEON ELECTRIC MACHINERY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEOJEON ELECTRIC MAC 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 SEOJEON ELECTRIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEOJEON ELECTRIC MAC has no effect on the direction of Tway Air i.e., Tway Air and SEOJEON ELECTRIC go up and down completely randomly.
Pair Corralation between Tway Air and SEOJEON ELECTRIC
Assuming the 90 days trading horizon Tway Air Co is expected to generate 0.8 times more return on investment than SEOJEON ELECTRIC. However, Tway Air Co is 1.25 times less risky than SEOJEON ELECTRIC. It trades about 0.04 of its potential returns per unit of risk. SEOJEON ELECTRIC MACHINERY is currently generating about 0.0 per unit of risk. If you would invest 191,500 in Tway Air Co on August 23, 2024 and sell it today you would earn a total of 96,000 from holding Tway Air Co or generate 50.13% 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. SEOJEON ELECTRIC MACHINERY
Performance |
| Timeline |
| Tway Air |
| SEOJEON ELECTRIC MAC |
Tway Air and SEOJEON ELECTRIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tway Air and SEOJEON ELECTRIC
The main advantage of trading using opposite Tway Air and SEOJEON ELECTRIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tway Air position performs unexpectedly, SEOJEON ELECTRIC 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 SEOJEON ELECTRIC will offset losses from the drop in SEOJEON ELECTRIC's long position.| Tway Air vs. Organic Special Pet | Tway Air vs. Hyundai Green Food | Tway Air vs. Samlip General Foods | Tway Air vs. Sam Yang Foods |
| SEOJEON ELECTRIC vs. Ssangyong Information Communication | SEOJEON ELECTRIC vs. Daol Investment Securities | SEOJEON ELECTRIC vs. Shinsegae Information Communication | SEOJEON ELECTRIC vs. SK Telecom 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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