Correlation Between Hurum and TSE
Can any of the company-specific risk be diversified away by investing in both Hurum and TSE 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 Hurum and TSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hurum Co and TSE Co, you can compare the effects of market volatilities on Hurum and TSE 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 Hurum with a short position of TSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hurum and TSE.
Diversification Opportunities for Hurum and TSE
Very poor diversification
The 3 months correlation between Hurum and TSE is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Hurum Co and TSE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TSE Co and Hurum 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 Hurum Co are associated (or correlated) with TSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TSE Co has no effect on the direction of Hurum i.e., Hurum and TSE go up and down completely randomly.
Pair Corralation between Hurum and TSE
Assuming the 90 days trading horizon Hurum Co is expected to generate 0.55 times more return on investment than TSE. However, Hurum Co is 1.83 times less risky than TSE. It trades about 0.27 of its potential returns per unit of risk. TSE Co is currently generating about 0.12 per unit of risk. If you would invest 70,000 in Hurum Co on October 24, 2024 and sell it today you would earn a total of 5,400 from holding Hurum Co or generate 7.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hurum Co vs. TSE Co
Performance |
| Timeline |
| Hurum |
| TSE Co |
Hurum and TSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hurum and TSE
The main advantage of trading using opposite Hurum and TSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurum position performs unexpectedly, TSE 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 TSE will offset losses from the drop in TSE's long position.| Hurum vs. Tamul Multimedia Co | Hurum vs. Hanwha Life Insurance | Hurum vs. Daewon Media Co | Hurum vs. DC Media Co |
| TSE vs. Inzi Display CoLtd | TSE vs. National Plastic Co | TSE vs. Samsung Publishing Co | TSE vs. Kolon Plastics |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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