Correlation Between Tamul Multimedia and Korea Computer
Can any of the company-specific risk be diversified away by investing in both Tamul Multimedia and Korea 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 Tamul Multimedia and Korea Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tamul Multimedia Co and Korea Computer, you can compare the effects of market volatilities on Tamul Multimedia and Korea 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 Tamul Multimedia with a short position of Korea Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tamul Multimedia and Korea Computer.
Diversification Opportunities for Tamul Multimedia and Korea Computer
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tamul and Korea is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Tamul Multimedia Co and Korea Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Computer and Tamul Multimedia 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 Tamul Multimedia Co are associated (or correlated) with Korea Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Computer has no effect on the direction of Tamul Multimedia i.e., Tamul Multimedia and Korea Computer go up and down completely randomly.
Pair Corralation between Tamul Multimedia and Korea Computer
Assuming the 90 days trading horizon Tamul Multimedia Co is expected to generate 0.73 times more return on investment than Korea Computer. However, Tamul Multimedia Co is 1.38 times less risky than Korea Computer. It trades about 0.04 of its potential returns per unit of risk. Korea Computer is currently generating about 0.02 per unit of risk. If you would invest 420,000 in Tamul Multimedia Co on August 30, 2024 and sell it today you would earn a total of 7,000 from holding Tamul Multimedia Co or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tamul Multimedia Co vs. Korea Computer
Performance |
| Timeline |
| Tamul Multimedia |
| Korea Computer |
Tamul Multimedia and Korea Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tamul Multimedia and Korea Computer
The main advantage of trading using opposite Tamul Multimedia and Korea Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tamul Multimedia position performs unexpectedly, Korea 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 Korea Computer will offset losses from the drop in Korea Computer's long position.| Tamul Multimedia vs. SK Hynix | Tamul Multimedia vs. LX Semicon Co | Tamul Multimedia vs. People Technology | Tamul Multimedia vs. Hana Materials |
| Korea Computer vs. Daou Data Corp | Korea Computer vs. Busan Industrial Co | Korea Computer vs. Busan Ind | Korea Computer vs. Shinhan WTI Futures |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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