Correlation Between TS Investment and Korea Refractories
Can any of the company-specific risk be diversified away by investing in both TS Investment and Korea Refractories 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 Korea Refractories 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 Korea Refractories Co, you can compare the effects of market volatilities on TS Investment and Korea Refractories 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 Korea Refractories. Check out your portfolio center. Please also check ongoing floating volatility patterns of TS Investment and Korea Refractories.
Diversification Opportunities for TS Investment and Korea Refractories
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 246690 and Korea is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding TS Investment Corp and Korea Refractories Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Refractories 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 Korea Refractories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Refractories has no effect on the direction of TS Investment i.e., TS Investment and Korea Refractories go up and down completely randomly.
Pair Corralation between TS Investment and Korea Refractories
Assuming the 90 days trading horizon TS Investment is expected to generate 12.75 times less return on investment than Korea Refractories. In addition to that, TS Investment is 2.93 times more volatile than Korea Refractories Co. It trades about 0.01 of its total potential returns per unit of risk. Korea Refractories Co is currently generating about 0.33 per unit of volatility. If you would invest 213,990 in Korea Refractories Co on October 25, 2024 and sell it today you would earn a total of 12,510 from holding Korea Refractories Co or generate 5.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TS Investment Corp vs. Korea Refractories Co
Performance |
| Timeline |
| TS Investment Corp |
| Korea Refractories |
TS Investment and Korea Refractories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TS Investment and Korea Refractories
The main advantage of trading using opposite TS Investment and Korea Refractories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TS Investment position performs unexpectedly, Korea Refractories 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 Korea Refractories will offset losses from the drop in Korea Refractories' 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 |
| Korea Refractories vs. KB Financial Group | Korea Refractories vs. Shinhan Financial Group | Korea Refractories vs. Hana Financial | Korea Refractories vs. Woori Financial Group |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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