Correlation Between SillaJen and Tway Air
Can any of the company-specific risk be diversified away by investing in both SillaJen 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 SillaJen and Tway Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SillaJen and Tway Air Co, you can compare the effects of market volatilities on SillaJen 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 SillaJen with a short position of Tway Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of SillaJen and Tway Air.
Diversification Opportunities for SillaJen and Tway Air
Good diversification
The 3 months correlation between SillaJen and Tway is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding SillaJen and Tway Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tway Air and SillaJen 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 SillaJen 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 SillaJen i.e., SillaJen and Tway Air go up and down completely randomly.
Pair Corralation between SillaJen and Tway Air
Assuming the 90 days trading horizon SillaJen is expected to generate 0.32 times more return on investment than Tway Air. However, SillaJen is 3.11 times less risky than Tway Air. It trades about -0.08 of its potential returns per unit of risk. Tway Air Co is currently generating about -0.34 per unit of risk. If you would invest 252,500 in SillaJen on November 27, 2024 and sell it today you would lose (7,000) from holding SillaJen or give up 2.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SillaJen vs. Tway Air Co
Performance |
| Timeline |
| SillaJen |
| Tway Air |
SillaJen and Tway Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SillaJen and Tway Air
The main advantage of trading using opposite SillaJen and Tway Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SillaJen 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.| SillaJen vs. Sangsin Energy Display | SillaJen vs. DoubleU Games Co | SillaJen vs. Iljin Display | SillaJen vs. Husteel |
| Tway Air vs. Jahwa Electronics Co | Tway Air vs. Daeduck Electronics Co | Tway Air vs. SungMoon Electronics Co | Tway Air vs. Samyoung Electronics 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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