Correlation Between Hyosung Chemical and Tae Kyung
Can any of the company-specific risk be diversified away by investing in both Hyosung Chemical and Tae Kyung 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 Hyosung Chemical and Tae Kyung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyosung Chemical Corp and Tae Kyung Chemical, you can compare the effects of market volatilities on Hyosung Chemical and Tae Kyung 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 Hyosung Chemical with a short position of Tae Kyung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyosung Chemical and Tae Kyung.
Diversification Opportunities for Hyosung Chemical and Tae Kyung
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hyosung and Tae is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Hyosung Chemical Corp and Tae Kyung Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tae Kyung Chemical and Hyosung Chemical 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 Hyosung Chemical Corp are associated (or correlated) with Tae Kyung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tae Kyung Chemical has no effect on the direction of Hyosung Chemical i.e., Hyosung Chemical and Tae Kyung go up and down completely randomly.
Pair Corralation between Hyosung Chemical and Tae Kyung
Assuming the 90 days trading horizon Hyosung Chemical Corp is expected to generate 5.92 times more return on investment than Tae Kyung. However, Hyosung Chemical is 5.92 times more volatile than Tae Kyung Chemical. It trades about 0.02 of its potential returns per unit of risk. Tae Kyung Chemical is currently generating about 0.03 per unit of risk. If you would invest 3,965,000 in Hyosung Chemical Corp on September 5, 2024 and sell it today you would lose (65,000) from holding Hyosung Chemical Corp or give up 1.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyosung Chemical Corp vs. Tae Kyung Chemical
Performance |
| Timeline |
| Hyosung Chemical Corp |
| Tae Kyung Chemical |
Hyosung Chemical and Tae Kyung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyosung Chemical and Tae Kyung
The main advantage of trading using opposite Hyosung Chemical and Tae Kyung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyosung Chemical position performs unexpectedly, Tae Kyung 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 Tae Kyung will offset losses from the drop in Tae Kyung's long position.| Hyosung Chemical vs. LG Chem | Hyosung Chemical vs. DukSan Neolux CoLtd | Hyosung Chemical vs. LIG ES SPAC | Hyosung Chemical vs. Sukgyung AT Co |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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