Correlation Between Taewoong Logistics and UNISEM
Can any of the company-specific risk be diversified away by investing in both Taewoong Logistics and UNISEM 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 Taewoong Logistics and UNISEM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taewoong Logistics CoLtd and UNISEM Co, you can compare the effects of market volatilities on Taewoong Logistics and UNISEM 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 Taewoong Logistics with a short position of UNISEM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taewoong Logistics and UNISEM.
Diversification Opportunities for Taewoong Logistics and UNISEM
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Taewoong and UNISEM is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Taewoong Logistics CoLtd and UNISEM Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNISEM and Taewoong Logistics 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 Taewoong Logistics CoLtd are associated (or correlated) with UNISEM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNISEM has no effect on the direction of Taewoong Logistics i.e., Taewoong Logistics and UNISEM go up and down completely randomly.
Pair Corralation between Taewoong Logistics and UNISEM
Assuming the 90 days trading horizon Taewoong Logistics CoLtd is expected to generate 0.86 times more return on investment than UNISEM. However, Taewoong Logistics CoLtd is 1.17 times less risky than UNISEM. It trades about -0.05 of its potential returns per unit of risk. UNISEM Co is currently generating about -0.28 per unit of risk. If you would invest 300,000 in Taewoong Logistics CoLtd on September 3, 2024 and sell it today you would lose (7,500) from holding Taewoong Logistics CoLtd or give up 2.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taewoong Logistics CoLtd vs. UNISEM Co
Performance |
| Timeline |
| Taewoong Logistics CoLtd |
| UNISEM |
Taewoong Logistics and UNISEM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taewoong Logistics and UNISEM
The main advantage of trading using opposite Taewoong Logistics and UNISEM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taewoong Logistics position performs unexpectedly, UNISEM 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 UNISEM will offset losses from the drop in UNISEM's long position.| Taewoong Logistics vs. Daejung Chemicals Metals | Taewoong Logistics vs. Koryo Credit Information | Taewoong Logistics vs. Dgb Financial | Taewoong Logistics vs. Korean Reinsurance 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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