Correlation Between TK Chemical and Automobile
Can any of the company-specific risk be diversified away by investing in both TK Chemical and Automobile 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 Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TK Chemical and Automobile Pc, you can compare the effects of market volatilities on TK Chemical and Automobile 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 Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of TK Chemical and Automobile.
Diversification Opportunities for TK Chemical and Automobile
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 104480 and Automobile is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding TK Chemical and Automobile Pc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automobile Pc 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 Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automobile Pc has no effect on the direction of TK Chemical i.e., TK Chemical and Automobile go up and down completely randomly.
Pair Corralation between TK Chemical and Automobile
Assuming the 90 days trading horizon TK Chemical is expected to generate 1.91 times more return on investment than Automobile. However, TK Chemical is 1.91 times more volatile than Automobile Pc. It trades about 0.1 of its potential returns per unit of risk. Automobile Pc is currently generating about -0.18 per unit of risk. If you would invest 130,900 in TK Chemical on October 25, 2024 and sell it today you would earn a total of 23,700 from holding TK Chemical or generate 18.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TK Chemical vs. Automobile Pc
Performance |
| Timeline |
| TK Chemical |
| Automobile Pc |
TK Chemical and Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TK Chemical and Automobile
The main advantage of trading using opposite TK Chemical and Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TK Chemical position performs unexpectedly, Automobile 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 Automobile will offset losses from the drop in Automobile's long position.| TK Chemical vs. Samsung Electronics Co | TK Chemical vs. Samsung Electronics Co | TK Chemical vs. KB Financial Group | TK Chemical vs. Shinhan Financial Group |
| Automobile vs. Sajo Seafood | Automobile vs. Duksan Hi Metal | Automobile vs. DONGKUK TED METAL | Automobile vs. FOODWELL 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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