Correlation Between VAIV and Tae Kyung
Can any of the company-specific risk be diversified away by investing in both VAIV 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 VAIV and Tae Kyung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VAIV Co and Tae Kyung Chemical, you can compare the effects of market volatilities on VAIV 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 VAIV with a short position of Tae Kyung. Check out your portfolio center. Please also check ongoing floating volatility patterns of VAIV and Tae Kyung.
Diversification Opportunities for VAIV and Tae Kyung
Weak diversification
The 3 months correlation between VAIV and Tae is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding VAIV Co 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 VAIV 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 VAIV Co 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 VAIV i.e., VAIV and Tae Kyung go up and down completely randomly.
Pair Corralation between VAIV and Tae Kyung
Assuming the 90 days trading horizon VAIV Co is expected to under-perform the Tae Kyung. In addition to that, VAIV is 2.79 times more volatile than Tae Kyung Chemical. It trades about -0.04 of its total potential returns per unit of risk. Tae Kyung Chemical is currently generating about 0.01 per unit of volatility. If you would invest 1,095,000 in Tae Kyung Chemical on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Tae Kyung Chemical or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VAIV Co vs. Tae Kyung Chemical
Performance |
| Timeline |
| VAIV |
| Tae Kyung Chemical |
VAIV and Tae Kyung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VAIV and Tae Kyung
The main advantage of trading using opposite VAIV and Tae Kyung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VAIV 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.| VAIV vs. HB Technology TD | VAIV vs. Kbi Metal Co | VAIV vs. Kukil Metal Co | VAIV vs. Global Standard Technology |
| Tae Kyung vs. Seoul Electronics Telecom | Tae Kyung vs. Samsung Publishing Co | Tae Kyung vs. Visang Education | Tae Kyung vs. Hannong Chemicals |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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