Correlation Between Green Cross and TAEYANG
Can any of the company-specific risk be diversified away by investing in both Green Cross and TAEYANG 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 Green Cross and TAEYANG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Cross Medical and TAEYANG, you can compare the effects of market volatilities on Green Cross and TAEYANG 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 Green Cross with a short position of TAEYANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Cross and TAEYANG.
Diversification Opportunities for Green Cross and TAEYANG
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Green and TAEYANG is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Green Cross Medical and TAEYANG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAEYANG and Green Cross 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 Green Cross Medical are associated (or correlated) with TAEYANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAEYANG has no effect on the direction of Green Cross i.e., Green Cross and TAEYANG go up and down completely randomly.
Pair Corralation between Green Cross and TAEYANG
Assuming the 90 days trading horizon Green Cross is expected to generate 1.3 times less return on investment than TAEYANG. In addition to that, Green Cross is 2.88 times more volatile than TAEYANG. It trades about 0.05 of its total potential returns per unit of risk. TAEYANG is currently generating about 0.18 per unit of volatility. If you would invest 579,046 in TAEYANG on October 30, 2024 and sell it today you would earn a total of 58,954 from holding TAEYANG or generate 10.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Green Cross Medical vs. TAEYANG
Performance |
| Timeline |
| Green Cross Medical |
| TAEYANG |
Green Cross and TAEYANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Cross and TAEYANG
The main advantage of trading using opposite Green Cross and TAEYANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Cross position performs unexpectedly, TAEYANG 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 TAEYANG will offset losses from the drop in TAEYANG's long position.| Green Cross vs. Medy Tox | Green Cross vs. InBody CoLtd | Green Cross vs. Soulbrain Holdings Co | Green Cross vs. Busan Industrial Co |
| TAEYANG vs. Dongsin Engineering Construction | TAEYANG vs. Doosan Fuel Cell | TAEYANG vs. Daishin Balance 1 | TAEYANG vs. Total Soft Bank |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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