Correlation Between Daesung Hi and Tway Air
Can any of the company-specific risk be diversified away by investing in both Daesung Hi and Tway Air 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 Daesung Hi and Tway Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daesung Hi Tech Co and Tway Air Co, you can compare the effects of market volatilities on Daesung Hi and Tway Air 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 Daesung Hi with a short position of Tway Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daesung Hi and Tway Air.
Diversification Opportunities for Daesung Hi and Tway Air
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Daesung and Tway is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Daesung Hi Tech Co and Tway Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tway Air and Daesung Hi 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 Daesung Hi Tech Co are associated (or correlated) with Tway Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tway Air has no effect on the direction of Daesung Hi i.e., Daesung Hi and Tway Air go up and down completely randomly.
Pair Corralation between Daesung Hi and Tway Air
Assuming the 90 days trading horizon Daesung Hi Tech Co is expected to under-perform the Tway Air. In addition to that, Daesung Hi is 1.01 times more volatile than Tway Air Co. It trades about -0.04 of its total potential returns per unit of risk. Tway Air Co is currently generating about 0.03 per unit of volatility. If you would invest 276,500 in Tway Air Co on September 3, 2024 and sell it today you would earn a total of 18,000 from holding Tway Air Co or generate 6.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daesung Hi Tech Co vs. Tway Air Co
Performance |
| Timeline |
| Daesung Hi Tech |
| Tway Air |
Daesung Hi and Tway Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daesung Hi and Tway Air
The main advantage of trading using opposite Daesung Hi and Tway Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daesung Hi position performs unexpectedly, Tway Air 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 Tway Air will offset losses from the drop in Tway Air's long position.| Daesung Hi vs. Bohae Brewery | Daesung Hi vs. Clean Science co | Daesung Hi vs. Korea Investment Holdings | Daesung Hi vs. Nh Investment And |
| Tway Air vs. Jin Air Co | Tway Air vs. Air Busan Co | Tway Air vs. Busan Industrial Co | Tway Air vs. UNISEM 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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