Correlation Between TSI and SK Chemicals
Can any of the company-specific risk be diversified away by investing in both TSI and SK Chemicals 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 SK Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TSI Co and SK Chemicals Co, you can compare the effects of market volatilities on TSI and SK Chemicals 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 SK Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of TSI and SK Chemicals.
Diversification Opportunities for TSI and SK Chemicals
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between TSI and 285130 is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding TSI Co and SK Chemicals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Chemicals 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 SK Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Chemicals has no effect on the direction of TSI i.e., TSI and SK Chemicals go up and down completely randomly.
Pair Corralation between TSI and SK Chemicals
Assuming the 90 days trading horizon TSI Co is expected to under-perform the SK Chemicals. In addition to that, TSI is 1.17 times more volatile than SK Chemicals Co. It trades about -0.35 of its total potential returns per unit of risk. SK Chemicals Co is currently generating about -0.29 per unit of volatility. If you would invest 4,845,000 in SK Chemicals Co on September 4, 2024 and sell it today you would lose (615,000) from holding SK Chemicals Co or give up 12.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
TSI Co vs. SK Chemicals Co
Performance |
| Timeline |
| TSI Co |
| SK Chemicals |
TSI and SK Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TSI and SK Chemicals
The main advantage of trading using opposite TSI and SK Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TSI position performs unexpectedly, SK Chemicals 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 SK Chemicals will offset losses from the drop in SK Chemicals' long position.| TSI vs. Lotte Non Life Insurance | TSI vs. Kukil Metal Co | TSI vs. DONGKUK TED METAL | TSI vs. Taeyang Metal Industrial |
| SK Chemicals vs. LG Chemicals | SK Chemicals vs. POSCO Holdings | SK Chemicals vs. Lotte Chemical Corp | SK Chemicals vs. Hyundai Steel |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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