Correlation Between TS Investment and SH Energy
Can any of the company-specific risk be diversified away by investing in both TS Investment and SH Energy 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 TS Investment and SH Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TS Investment Corp and SH Energy Chemical, you can compare the effects of market volatilities on TS Investment and SH Energy 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 TS Investment with a short position of SH Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of TS Investment and SH Energy.
Diversification Opportunities for TS Investment and SH Energy
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 246690 and 002360 is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding TS Investment Corp and SH Energy Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SH Energy Chemical and TS Investment 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 TS Investment Corp are associated (or correlated) with SH Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SH Energy Chemical has no effect on the direction of TS Investment i.e., TS Investment and SH Energy go up and down completely randomly.
Pair Corralation between TS Investment and SH Energy
Assuming the 90 days trading horizon TS Investment Corp is expected to generate 1.23 times more return on investment than SH Energy. However, TS Investment is 1.23 times more volatile than SH Energy Chemical. It trades about 0.08 of its potential returns per unit of risk. SH Energy Chemical is currently generating about -0.04 per unit of risk. If you would invest 99,700 in TS Investment Corp on September 12, 2024 and sell it today you would earn a total of 6,800 from holding TS Investment Corp or generate 6.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TS Investment Corp vs. SH Energy Chemical
Performance |
| Timeline |
| TS Investment Corp |
| SH Energy Chemical |
TS Investment and SH Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TS Investment and SH Energy
The main advantage of trading using opposite TS Investment and SH Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TS Investment position performs unexpectedly, SH Energy 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 SH Energy will offset losses from the drop in SH Energy's long position.| TS Investment vs. Samsung Electronics Co | TS Investment vs. Samsung Electronics Co | TS Investment vs. LG Energy Solution | TS Investment vs. SK Hynix |
| SH Energy vs. Samsung Electronics Co | SH Energy vs. Samsung Electronics Co | SH Energy vs. SK Hynix | SH Energy vs. POSCO Holdings |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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