Correlation Between TK Chemical and Korea Shipbuilding
Can any of the company-specific risk be diversified away by investing in both TK Chemical and Korea Shipbuilding 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 TK Chemical and Korea Shipbuilding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TK Chemical and Korea Shipbuilding Offshore, you can compare the effects of market volatilities on TK Chemical and Korea Shipbuilding 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 TK Chemical with a short position of Korea Shipbuilding. Check out your portfolio center. Please also check ongoing floating volatility patterns of TK Chemical and Korea Shipbuilding.
Diversification Opportunities for TK Chemical and Korea Shipbuilding
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 104480 and Korea is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding TK Chemical and Korea Shipbuilding Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Shipbuilding and TK Chemical 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 TK Chemical are associated (or correlated) with Korea Shipbuilding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Shipbuilding has no effect on the direction of TK Chemical i.e., TK Chemical and Korea Shipbuilding go up and down completely randomly.
Pair Corralation between TK Chemical and Korea Shipbuilding
Assuming the 90 days trading horizon TK Chemical is expected to under-perform the Korea Shipbuilding. In addition to that, TK Chemical is 1.1 times more volatile than Korea Shipbuilding Offshore. It trades about -0.04 of its total potential returns per unit of risk. Korea Shipbuilding Offshore is currently generating about 0.1 per unit of volatility. If you would invest 7,990,000 in Korea Shipbuilding Offshore on October 29, 2024 and sell it today you would earn a total of 14,860,000 from holding Korea Shipbuilding Offshore or generate 185.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TK Chemical vs. Korea Shipbuilding Offshore
Performance |
| Timeline |
| TK Chemical |
| Korea Shipbuilding |
TK Chemical and Korea Shipbuilding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TK Chemical and Korea Shipbuilding
The main advantage of trading using opposite TK Chemical and Korea Shipbuilding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TK Chemical position performs unexpectedly, Korea Shipbuilding 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 Shipbuilding will offset losses from the drop in Korea Shipbuilding's long position.| TK Chemical vs. PJ Metal Co | TK Chemical vs. Eagon Industrial Co | TK Chemical vs. SCI Information Service | TK Chemical vs. Formetal Co |
| Korea Shipbuilding vs. Daiyang Metal Co | Korea Shipbuilding vs. Vissem Electronics Co | Korea Shipbuilding vs. Shinil Electronics Co | Korea Shipbuilding vs. Daejung Chemicals Metals |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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