Correlation Between TOPMATERIAL and Korean Drug
Can any of the company-specific risk be diversified away by investing in both TOPMATERIAL and Korean Drug 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 TOPMATERIAL and Korean Drug into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOPMATERIAL LTD and Korean Drug Co, you can compare the effects of market volatilities on TOPMATERIAL and Korean Drug 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 TOPMATERIAL with a short position of Korean Drug. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOPMATERIAL and Korean Drug.
Diversification Opportunities for TOPMATERIAL and Korean Drug
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between TOPMATERIAL and Korean is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding TOPMATERIAL LTD and Korean Drug Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korean Drug and TOPMATERIAL 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 TOPMATERIAL LTD are associated (or correlated) with Korean Drug. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korean Drug has no effect on the direction of TOPMATERIAL i.e., TOPMATERIAL and Korean Drug go up and down completely randomly.
Pair Corralation between TOPMATERIAL and Korean Drug
Assuming the 90 days trading horizon TOPMATERIAL LTD is expected to generate 2.38 times more return on investment than Korean Drug. However, TOPMATERIAL is 2.38 times more volatile than Korean Drug Co. It trades about 0.0 of its potential returns per unit of risk. Korean Drug Co is currently generating about -0.03 per unit of risk. If you would invest 3,950,000 in TOPMATERIAL LTD on November 7, 2024 and sell it today you would lose (1,420,000) from holding TOPMATERIAL LTD or give up 35.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TOPMATERIAL LTD vs. Korean Drug Co
Performance |
| Timeline |
| TOPMATERIAL LTD |
| Korean Drug |
TOPMATERIAL and Korean Drug Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOPMATERIAL and Korean Drug
The main advantage of trading using opposite TOPMATERIAL and Korean Drug positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOPMATERIAL position performs unexpectedly, Korean Drug 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 Korean Drug will offset losses from the drop in Korean Drug's long position.| TOPMATERIAL vs. INNOX Advanced Materials | TOPMATERIAL vs. Nh Investment And | TOPMATERIAL vs. DB Financial Investment | TOPMATERIAL vs. Sangsangin Investment Securities |
| Korean Drug vs. SAMG Entertainment Co | Korean Drug vs. SKONEC Entertainment Co | Korean Drug vs. Jeju Air Co | Korean Drug vs. Air Busan Co |
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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