Correlation Between Daechang Steel and TJ Media
Can any of the company-specific risk be diversified away by investing in both Daechang Steel 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 Daechang Steel and TJ Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daechang Steel Co and TJ media Co, you can compare the effects of market volatilities on Daechang Steel 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 Daechang Steel with a short position of TJ Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daechang Steel and TJ Media.
Diversification Opportunities for Daechang Steel and TJ Media
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daechang and 032540 is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Daechang Steel Co and TJ media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TJ media and Daechang Steel 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 Daechang Steel Co 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 Daechang Steel i.e., Daechang Steel and TJ Media go up and down completely randomly.
Pair Corralation between Daechang Steel and TJ Media
Assuming the 90 days trading horizon Daechang Steel Co is expected to generate 1.54 times more return on investment than TJ Media. However, Daechang Steel is 1.54 times more volatile than TJ media Co. It trades about 0.25 of its potential returns per unit of risk. TJ media Co is currently generating about 0.22 per unit of risk. If you would invest 190,099 in Daechang Steel Co on October 13, 2024 and sell it today you would earn a total of 15,901 from holding Daechang Steel Co or generate 8.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Daechang Steel Co vs. TJ media Co
Performance |
| Timeline |
| Daechang Steel |
| TJ media |
Daechang Steel and TJ Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daechang Steel and TJ Media
The main advantage of trading using opposite Daechang Steel and TJ Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daechang Steel 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.| Daechang Steel vs. Samlip General Foods | Daechang Steel vs. FoodNamoo | Daechang Steel vs. Aprogen Healthcare Games | Daechang Steel vs. Mobile Appliance |
| TJ Media vs. Samhyun Steel Co | TJ Media vs. Daechang Steel Co | TJ Media vs. Samyoung Electronics Co | TJ Media vs. J Steel 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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