Correlation Between TSI and Stic Investments
Can any of the company-specific risk be diversified away by investing in both TSI and Stic Investments 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 TSI and Stic Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TSI Co and Stic Investments, you can compare the effects of market volatilities on TSI and Stic Investments 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 TSI with a short position of Stic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of TSI and Stic Investments.
Diversification Opportunities for TSI and Stic Investments
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TSI and Stic is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding TSI Co and Stic Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stic Investments and TSI 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 TSI Co are associated (or correlated) with Stic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stic Investments has no effect on the direction of TSI i.e., TSI and Stic Investments go up and down completely randomly.
Pair Corralation between TSI and Stic Investments
Assuming the 90 days trading horizon TSI Co is expected to under-perform the Stic Investments. In addition to that, TSI is 1.09 times more volatile than Stic Investments. It trades about -0.35 of its total potential returns per unit of risk. Stic Investments is currently generating about 0.14 per unit of volatility. If you would invest 809,000 in Stic Investments on September 4, 2024 and sell it today you would earn a total of 53,000 from holding Stic Investments or generate 6.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TSI Co vs. Stic Investments
Performance |
| Timeline |
| TSI Co |
| Stic Investments |
TSI and Stic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TSI and Stic Investments
The main advantage of trading using opposite TSI and Stic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TSI position performs unexpectedly, Stic Investments 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 Stic Investments will offset losses from the drop in Stic Investments' long position.| TSI vs. Lotte Non Life Insurance | TSI vs. Kukil Metal Co | TSI vs. DONGKUK TED METAL | TSI vs. Taeyang Metal Industrial |
| Stic Investments vs. Dongsin Engineering Construction | Stic Investments vs. Doosan Fuel Cell | Stic Investments vs. Daishin Balance 1 | Stic Investments vs. Total Soft Bank |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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