Correlation Between Bosung Power and TES

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

By analyzing existing cross correlation between Bosung Power Technology and TES Co, you can compare the effects of market volatilities on Bosung Power and TES 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 Bosung Power with a short position of TES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bosung Power and TES.

Diversification Opportunities for Bosung Power and TES

0.43

Correlation Coefficient

Bosung Power  TES

Very weak diversification

The 3 months correlation between Bosung and TES is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Bosung Power Technology and TES Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TES Co and Bosung Power 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 Bosung Power Technology are associated (or correlated) with TES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TES Co has no effect on the direction of Bosung Power i.e., Bosung Power and TES go up and down completely randomly.

Pair Corralation between Bosung Power and TES

Assuming the 90 days trading horizon Bosung Power is expected to generate 1.19 times less return on investment than TES. But when comparing it to its historical volatility, Bosung Power Technology is 1.32 times less risky than TES. It trades about 0.44 of its potential returns per unit of risk. TES Co is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest  1,553,475  in TES Co on October 25, 2024 and sell it today you would earn a total of  366,525  from holding TES Co or generate 23.59% return on investment over 90 days.

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

Bosung Power Technology  vs.  TES Co

Bosung Power Technology

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bosung Power Technology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Bosung Power is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

TES Co

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TES Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, TES sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bosung Power and TES

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

The idea behind Bosung Power Technology and TES Co 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.