Correlation Between SEOJEON ELECTRIC and Tway Air
Can any of the company-specific risk be diversified away by investing in both SEOJEON ELECTRIC 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 SEOJEON ELECTRIC and Tway Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEOJEON ELECTRIC MACHINERY and Tway Air Co, you can compare the effects of market volatilities on SEOJEON ELECTRIC 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 SEOJEON ELECTRIC with a short position of Tway Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEOJEON ELECTRIC and Tway Air.
Diversification Opportunities for SEOJEON ELECTRIC and Tway Air
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between SEOJEON and Tway is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding SEOJEON ELECTRIC MACHINERY and Tway Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tway Air and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC MACHINERY 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 SEOJEON ELECTRIC i.e., SEOJEON ELECTRIC and Tway Air go up and down completely randomly.
Pair Corralation between SEOJEON ELECTRIC and Tway Air
Assuming the 90 days trading horizon SEOJEON ELECTRIC is expected to generate 1.35 times less return on investment than Tway Air. In addition to that, SEOJEON ELECTRIC is 1.33 times more volatile than Tway Air Co. It trades about 0.02 of its total potential returns per unit of risk. Tway Air Co is currently generating about 0.04 per unit of volatility. If you would invest 230,000 in Tway Air Co on August 27, 2024 and sell it today you would earn a total of 58,000 from holding Tway Air Co or generate 25.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEOJEON ELECTRIC MACHINERY vs. Tway Air Co
Performance |
| Timeline |
| SEOJEON ELECTRIC MAC |
| Tway Air |
SEOJEON ELECTRIC and Tway Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEOJEON ELECTRIC and Tway Air
The main advantage of trading using opposite SEOJEON ELECTRIC and Tway Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEOJEON ELECTRIC 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.| SEOJEON ELECTRIC vs. Samsung Electronics Co | SEOJEON ELECTRIC vs. Samsung Electronics Co | SEOJEON ELECTRIC vs. Hyundai Motor Co | SEOJEON ELECTRIC vs. Hyundai Motor |
| Tway Air vs. Ssangyong Materials Corp | Tway Air vs. Hanjin Transportation Co | Tway Air vs. PI Advanced Materials | Tway Air vs. CJ Seafood Corp |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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