Correlation Between Tesna and Wonik QnC
Can any of the company-specific risk be diversified away by investing in both Tesna and Wonik QnC 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 Tesna and Wonik QnC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tesna Inc and Wonik QnC, you can compare the effects of market volatilities on Tesna and Wonik QnC 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 Tesna with a short position of Wonik QnC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesna and Wonik QnC.
Diversification Opportunities for Tesna and Wonik QnC
Almost no diversification
The 3 months correlation between Tesna and Wonik is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Tesna Inc and Wonik QnC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonik QnC and Tesna 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 Tesna Inc are associated (or correlated) with Wonik QnC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonik QnC has no effect on the direction of Tesna i.e., Tesna and Wonik QnC go up and down completely randomly.
Pair Corralation between Tesna and Wonik QnC
Assuming the 90 days trading horizon Tesna Inc is expected to generate 1.4 times more return on investment than Wonik QnC. However, Tesna is 1.4 times more volatile than Wonik QnC. It trades about -0.07 of its potential returns per unit of risk. Wonik QnC is currently generating about -0.25 per unit of risk. If you would invest 2,935,000 in Tesna Inc on August 29, 2024 and sell it today you would lose (240,000) from holding Tesna Inc or give up 8.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tesna Inc vs. Wonik QnC
Performance |
| Timeline |
| Tesna Inc |
| Wonik QnC |
Tesna and Wonik QnC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesna and Wonik QnC
The main advantage of trading using opposite Tesna and Wonik QnC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesna position performs unexpectedly, Wonik QnC 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 Wonik QnC will offset losses from the drop in Wonik QnC's long position.The idea behind Tesna Inc and Wonik QnC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Wonik QnC vs. Lotte Data Communication | Wonik QnC vs. Alton Sports CoLtd | Wonik QnC vs. Seoul Electronics Telecom | Wonik QnC vs. DC Media 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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