Correlation Between Insung Information and TCC Steel

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

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

Diversification Opportunities for Insung Information and TCC Steel

0.23

Correlation Coefficient

Insung Information  TCC Steel

Modest diversification

The 3 months correlation between Insung and TCC is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Insung Information Co and TCC Steel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TCC Steel Corp and Insung Information 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 Insung Information Co are associated (or correlated) with TCC Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TCC Steel Corp has no effect on the direction of Insung Information i.e., Insung Information and TCC Steel go up and down completely randomly.

Pair Corralation between Insung Information and TCC Steel

Assuming the 90 days trading horizon Insung Information Co is expected to under-perform the TCC Steel. But the stock apears to be less risky and, when comparing its historical volatility, Insung Information Co is 2.04 times less risky than TCC Steel. The stock trades about -0.1 of its potential returns per unit of risk. The TCC Steel Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  2,906,566  in TCC Steel Corp on December 23, 2024 and sell it today you would lose (196,566) from holding TCC Steel Corp or give up 6.76% of portfolio value over 90 days.

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

Insung Information Co  vs.  TCC Steel Corp

Insung Information

Risk-Adjusted Performance

Very Weak

Over the last 90 days Insung Information Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

TCC Steel Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days TCC Steel Corp 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.

Pair Trading with Insung Information and TCC Steel

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

The idea behind Insung Information Co and TCC Steel Corp 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.

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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.