Correlation Between EV Advanced and TJ Media
Can any of the company-specific risk be diversified away by investing in both EV Advanced and TJ Media 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 EV Advanced and TJ Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EV Advanced Material and TJ media Co, you can compare the effects of market volatilities on EV Advanced and TJ Media 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 EV Advanced with a short position of TJ Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of EV Advanced and TJ Media.
Diversification Opportunities for EV Advanced and TJ Media
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 131400 and 032540 is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding EV Advanced Material and TJ media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TJ media and EV Advanced 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 EV Advanced Material are associated (or correlated) with TJ Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TJ media has no effect on the direction of EV Advanced i.e., EV Advanced and TJ Media go up and down completely randomly.
Pair Corralation between EV Advanced and TJ Media
Assuming the 90 days trading horizon EV Advanced Material is expected to generate 2.1 times more return on investment than TJ Media. However, EV Advanced is 2.1 times more volatile than TJ media Co. It trades about 0.11 of its potential returns per unit of risk. TJ media Co is currently generating about 0.16 per unit of risk. If you would invest 184,600 in EV Advanced Material on October 11, 2024 and sell it today you would earn a total of 8,600 from holding EV Advanced Material or generate 4.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EV Advanced Material vs. TJ media Co
Performance |
| Timeline |
| EV Advanced Material |
| TJ media |
EV Advanced and TJ Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EV Advanced and TJ Media
The main advantage of trading using opposite EV Advanced and TJ Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EV Advanced position performs unexpectedly, TJ Media 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 TJ Media will offset losses from the drop in TJ Media's long position.| EV Advanced vs. Shinhan Inverse Silver | EV Advanced vs. A Tech Solution Co | EV Advanced vs. RFTech Co | EV Advanced vs. SEOWONINTECHCoLtd |
| TJ Media vs. Kolon Plastics | TJ Media vs. Hyosung Advanced Materials | TJ Media vs. EV Advanced Material | TJ Media vs. Phoenix Materials 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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