Correlation Between Konan Technology and TSE
Can any of the company-specific risk be diversified away by investing in both Konan Technology 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 Konan Technology and TSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Konan Technology and TSE Co, you can compare the effects of market volatilities on Konan Technology 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 Konan Technology with a short position of TSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Konan Technology and TSE.
Diversification Opportunities for Konan Technology and TSE
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Konan and TSE is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Konan Technology and TSE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TSE Co and Konan Technology 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 Konan Technology 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 Konan Technology i.e., Konan Technology and TSE go up and down completely randomly.
Pair Corralation between Konan Technology and TSE
Assuming the 90 days trading horizon Konan Technology is expected to under-perform the TSE. In addition to that, Konan Technology is 1.62 times more volatile than TSE Co. It trades about -0.07 of its total potential returns per unit of risk. TSE Co is currently generating about 0.19 per unit of volatility. If you would invest 3,985,000 in TSE Co on October 20, 2024 and sell it today you would earn a total of 425,000 from holding TSE Co or generate 10.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Konan Technology vs. TSE Co
Performance |
| Timeline |
| Konan Technology |
| TSE Co |
Konan Technology and TSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Konan Technology and TSE
The main advantage of trading using opposite Konan Technology and TSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Konan Technology 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.| Konan Technology vs. LS Materials | Konan Technology vs. TOPMATERIAL LTD | Konan Technology vs. Nice Information Telecommunication | Konan Technology vs. RF Materials 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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