Correlation Between Tcc Steel and SeAH Bestee

Can any of the company-specific risk be diversified away by investing in both Tcc Steel and SeAH Bestee 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 Tcc Steel and SeAH Bestee into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tcc Steel and SeAH Bestee, you can compare the effects of market volatilities on Tcc Steel and SeAH Bestee 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 Tcc Steel with a short position of SeAH Bestee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tcc Steel and SeAH Bestee.

Diversification Opportunities for Tcc Steel and SeAH Bestee

0.36

Correlation Coefficient

Tcc Steel  SeAH Bestee

Weak diversification

The 3 months correlation between Tcc and SeAH is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Tcc Steel and SeAH Bestee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SeAH Bestee and Tcc Steel 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 Tcc Steel are associated (or correlated) with SeAH Bestee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SeAH Bestee has no effect on the direction of Tcc Steel i.e., Tcc Steel and SeAH Bestee go up and down completely randomly.

Pair Corralation between Tcc Steel and SeAH Bestee

Assuming the 90 days trading horizon Tcc Steel is expected to generate 2.19 times more return on investment than SeAH Bestee. However, Tcc Steel is 2.19 times more volatile than SeAH Bestee. It trades about -0.01 of its potential returns per unit of risk. SeAH Bestee is currently generating about -0.03 per unit of risk. If you would invest  2,904,458  in Tcc Steel on December 23, 2024 and sell it today you would lose (194,458) from holding Tcc Steel or give up 6.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Tcc Steel  vs.  SeAH Bestee

Tcc Steel

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tcc Steel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Tcc Steel is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SeAH Bestee

Risk-Adjusted Performance

Very Weak

Over the last 90 days SeAH Bestee has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SeAH Bestee is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tcc Steel and SeAH Bestee

The main advantage of trading using opposite Tcc Steel and SeAH Bestee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tcc Steel position performs unexpectedly, SeAH Bestee 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 SeAH Bestee will offset losses from the drop in SeAH Bestee's long position.

The idea behind Tcc Steel and SeAH Bestee pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.