Correlation Between Leaders Technology and Tae Kyung
Can any of the company-specific risk be diversified away by investing in both Leaders Technology and Tae Kyung 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 Leaders Technology and Tae Kyung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leaders Technology Investment and Tae Kyung Chemical, you can compare the effects of market volatilities on Leaders Technology and Tae Kyung 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 Leaders Technology with a short position of Tae Kyung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leaders Technology and Tae Kyung.
Diversification Opportunities for Leaders Technology and Tae Kyung
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Leaders and Tae is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Leaders Technology Investment and Tae Kyung Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tae Kyung Chemical and Leaders 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 Leaders Technology Investment are associated (or correlated) with Tae Kyung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tae Kyung Chemical has no effect on the direction of Leaders Technology i.e., Leaders Technology and Tae Kyung go up and down completely randomly.
Pair Corralation between Leaders Technology and Tae Kyung
Assuming the 90 days trading horizon Leaders Technology Investment is expected to under-perform the Tae Kyung. In addition to that, Leaders Technology is 2.32 times more volatile than Tae Kyung Chemical. It trades about -0.08 of its total potential returns per unit of risk. Tae Kyung Chemical is currently generating about 0.19 per unit of volatility. If you would invest 1,048,165 in Tae Kyung Chemical on October 5, 2024 and sell it today you would earn a total of 73,835 from holding Tae Kyung Chemical or generate 7.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Leaders Technology Investment vs. Tae Kyung Chemical
Performance |
Timeline |
Leaders Technology |
Tae Kyung Chemical |
Leaders Technology and Tae Kyung Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Leaders Technology and Tae Kyung
The main advantage of trading using opposite Leaders Technology and Tae Kyung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leaders Technology position performs unexpectedly, Tae Kyung 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 Tae Kyung will offset losses from the drop in Tae Kyung's long position.Leaders Technology vs. Hyundai Home Shopping | Leaders Technology vs. Digital Multimedia Technology | Leaders Technology vs. SKONEC Entertainment Co | Leaders Technology vs. Homecast CoLtd |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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