Correlation Between ENERGYMACHINERY KOREA and TJ Media
Can any of the company-specific risk be diversified away by investing in both ENERGYMACHINERY KOREA and TJ Media 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 ENERGYMACHINERY KOREA and TJ Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENERGYMACHINERY KOREA CoLtd and TJ media Co, you can compare the effects of market volatilities on ENERGYMACHINERY KOREA and TJ Media 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 ENERGYMACHINERY KOREA with a short position of TJ Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENERGYMACHINERY KOREA and TJ Media.
Diversification Opportunities for ENERGYMACHINERY KOREA and TJ Media
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ENERGYMACHINERY and 032540 is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding ENERGYMACHINERY KOREA CoLtd and TJ media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TJ media and ENERGYMACHINERY KOREA 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 ENERGYMACHINERY KOREA CoLtd are associated (or correlated) with TJ Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TJ media has no effect on the direction of ENERGYMACHINERY KOREA i.e., ENERGYMACHINERY KOREA and TJ Media go up and down completely randomly.
Pair Corralation between ENERGYMACHINERY KOREA and TJ Media
Assuming the 90 days trading horizon ENERGYMACHINERY KOREA CoLtd is expected to generate 1.57 times more return on investment than TJ Media. However, ENERGYMACHINERY KOREA is 1.57 times more volatile than TJ media Co. It trades about -0.01 of its potential returns per unit of risk. TJ media Co is currently generating about -0.02 per unit of risk. If you would invest 319,000 in ENERGYMACHINERY KOREA CoLtd on October 16, 2024 and sell it today you would lose (92,000) from holding ENERGYMACHINERY KOREA CoLtd or give up 28.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENERGYMACHINERY KOREA CoLtd vs. TJ media Co
Performance |
| Timeline |
| ENERGYMACHINERY KOREA |
| TJ media |
ENERGYMACHINERY KOREA and TJ Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENERGYMACHINERY KOREA and TJ Media
The main advantage of trading using opposite ENERGYMACHINERY KOREA and TJ Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENERGYMACHINERY KOREA position performs unexpectedly, TJ Media 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 TJ Media will offset losses from the drop in TJ Media's long position.| ENERGYMACHINERY KOREA vs. E Investment Development | ENERGYMACHINERY KOREA vs. Aprogen Healthcare Games | ENERGYMACHINERY KOREA vs. DB Financial Investment | ENERGYMACHINERY KOREA vs. Chorokbaem Healthcare Co |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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