Correlation Between TK Chemical and Shin Heung
Can any of the company-specific risk be diversified away by investing in both TK Chemical and Shin Heung 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 Shin Heung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TK Chemical and Shin Heung Energy, you can compare the effects of market volatilities on TK Chemical and Shin Heung 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 Shin Heung. Check out your portfolio center. Please also check ongoing floating volatility patterns of TK Chemical and Shin Heung.
Diversification Opportunities for TK Chemical and Shin Heung
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 104480 and Shin is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding TK Chemical and Shin Heung Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Heung Energy 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 Shin Heung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Heung Energy has no effect on the direction of TK Chemical i.e., TK Chemical and Shin Heung go up and down completely randomly.
Pair Corralation between TK Chemical and Shin Heung
Assuming the 90 days trading horizon TK Chemical is expected to generate 0.47 times more return on investment than Shin Heung. However, TK Chemical is 2.14 times less risky than Shin Heung. It trades about -0.29 of its potential returns per unit of risk. Shin Heung Energy is currently generating about -0.35 per unit of risk. If you would invest 145,100 in TK Chemical on August 29, 2024 and sell it today you would lose (13,100) from holding TK Chemical or give up 9.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TK Chemical vs. Shin Heung Energy
Performance |
| Timeline |
| TK Chemical |
| Shin Heung Energy |
TK Chemical and Shin Heung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TK Chemical and Shin Heung
The main advantage of trading using opposite TK Chemical and Shin Heung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TK Chemical position performs unexpectedly, Shin Heung 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 Shin Heung will offset losses from the drop in Shin Heung's long position.| TK Chemical vs. KMH Hitech Co | TK Chemical vs. GemVaxKAEL CoLtd | TK Chemical vs. Busan Industrial Co | TK Chemical vs. Busan Ind |
| Shin Heung vs. Ecopro BM Co | Shin Heung vs. Sangsin Energy Display | Shin Heung vs. Bosung Power Technology | Shin Heung vs. APro 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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