Correlation Between Incar Financial and Tway Air
Can any of the company-specific risk be diversified away by investing in both Incar Financial 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 Incar Financial and Tway Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Incar Financial Service and Tway Air Co, you can compare the effects of market volatilities on Incar Financial 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 Incar Financial with a short position of Tway Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Incar Financial and Tway Air.
Diversification Opportunities for Incar Financial and Tway Air
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Incar and Tway is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Incar Financial Service and Tway Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tway Air and Incar Financial 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 Incar Financial Service 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 Incar Financial i.e., Incar Financial and Tway Air go up and down completely randomly.
Pair Corralation between Incar Financial and Tway Air
Assuming the 90 days trading horizon Incar Financial is expected to generate 6.54 times less return on investment than Tway Air. But when comparing it to its historical volatility, Incar Financial Service is 1.85 times less risky than Tway Air. It trades about 0.16 of its potential returns per unit of risk. Tway Air Co is currently generating about 0.57 of returns per unit of risk over similar time horizon. If you would invest 248,000 in Tway Air Co on October 28, 2024 and sell it today you would earn a total of 163,000 from holding Tway Air Co or generate 65.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Incar Financial Service vs. Tway Air Co
Performance |
| Timeline |
| Incar Financial Service |
| Tway Air |
Incar Financial and Tway Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Incar Financial and Tway Air
The main advantage of trading using opposite Incar Financial and Tway Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Incar Financial 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.| Incar Financial vs. Miwon Chemical | Incar Financial vs. CG Hi Tech | Incar Financial vs. Display Tech Co | Incar Financial vs. Digital Power Communications |
| Tway Air vs. Jin Air Co | Tway Air vs. Air Busan Co | Tway Air vs. Busan Industrial Co | Tway Air vs. Busan Ind |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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