Correlation Between Alton Sports and TAEYANG
Can any of the company-specific risk be diversified away by investing in both Alton Sports and TAEYANG 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 Alton Sports and TAEYANG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alton Sports CoLtd and TAEYANG, you can compare the effects of market volatilities on Alton Sports and TAEYANG 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 Alton Sports with a short position of TAEYANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alton Sports and TAEYANG.
Diversification Opportunities for Alton Sports and TAEYANG
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alton and TAEYANG is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Alton Sports CoLtd and TAEYANG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAEYANG and Alton Sports 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 Alton Sports CoLtd are associated (or correlated) with TAEYANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAEYANG has no effect on the direction of Alton Sports i.e., Alton Sports and TAEYANG go up and down completely randomly.
Pair Corralation between Alton Sports and TAEYANG
Assuming the 90 days trading horizon Alton Sports CoLtd is expected to under-perform the TAEYANG. In addition to that, Alton Sports is 2.16 times more volatile than TAEYANG. It trades about -0.08 of its total potential returns per unit of risk. TAEYANG is currently generating about -0.02 per unit of volatility. If you would invest 754,569 in TAEYANG on September 26, 2024 and sell it today you would lose (108,569) from holding TAEYANG or give up 14.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Alton Sports CoLtd vs. TAEYANG
Performance |
| Timeline |
| Alton Sports CoLtd |
| TAEYANG |
Alton Sports and TAEYANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alton Sports and TAEYANG
The main advantage of trading using opposite Alton Sports and TAEYANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alton Sports position performs unexpectedly, TAEYANG 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 TAEYANG will offset losses from the drop in TAEYANG's long position.| Alton Sports vs. Woori Technology Investment | Alton Sports vs. Samsung Card Co | Alton Sports vs. Korea Real Estate | Alton Sports vs. CHOROKBAEM PANY Co |
| TAEYANG vs. Heungkuk Metaltech CoLtd | TAEYANG vs. LG Household Healthcare | TAEYANG vs. MetaLabs Co | TAEYANG vs. Daishin Information Communications |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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