Correlation Between Taewoong Logistics and HuMC
Can any of the company-specific risk be diversified away by investing in both Taewoong Logistics and HuMC 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 HuMC 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 HuMC Co, you can compare the effects of market volatilities on Taewoong Logistics and HuMC 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 HuMC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taewoong Logistics and HuMC.
Diversification Opportunities for Taewoong Logistics and HuMC
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Taewoong and HuMC is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Taewoong Logistics CoLtd and HuMC Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HuMC 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 HuMC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HuMC has no effect on the direction of Taewoong Logistics i.e., Taewoong Logistics and HuMC go up and down completely randomly.
Pair Corralation between Taewoong Logistics and HuMC
Assuming the 90 days trading horizon Taewoong Logistics CoLtd is expected to generate 2.43 times more return on investment than HuMC. However, Taewoong Logistics is 2.43 times more volatile than HuMC Co. It trades about -0.05 of its potential returns per unit of risk. HuMC Co is currently generating about -0.16 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taewoong Logistics CoLtd vs. HuMC Co
Performance |
| Timeline |
| Taewoong Logistics CoLtd |
| HuMC |
Taewoong Logistics and HuMC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taewoong Logistics and HuMC
The main advantage of trading using opposite Taewoong Logistics and HuMC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taewoong Logistics position performs unexpectedly, HuMC 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 HuMC will offset losses from the drop in HuMC'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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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