Correlation Between Taegu Broadcasting and N Citron

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

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

Diversification Opportunities for Taegu Broadcasting and N Citron

-0.24

Correlation Coefficient

Taegu Broadcasting  N Citron

Very good diversification

The 3 months correlation between Taegu and 101400 is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Taegu Broadcasting and N Citron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on N Citron and Taegu Broadcasting 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 Taegu Broadcasting are associated (or correlated) with N Citron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of N Citron has no effect on the direction of Taegu Broadcasting i.e., Taegu Broadcasting and N Citron go up and down completely randomly.

Pair Corralation between Taegu Broadcasting and N Citron

Assuming the 90 days trading horizon Taegu Broadcasting is expected to under-perform the N Citron. But the stock apears to be less risky and, when comparing its historical volatility, Taegu Broadcasting is 1.19 times less risky than N Citron. The stock trades about -0.13 of its potential returns per unit of risk. The N Citron is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  38,100  in N Citron on October 10, 2024 and sell it today you would earn a total of  2,400  from holding N Citron or generate 6.3% return on investment over 90 days.

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

Taegu Broadcasting  vs.  N Citron

Taegu Broadcasting

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Taegu Broadcasting are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Taegu Broadcasting may actually be approaching a critical reversion point that can send shares even higher in February 2025.

N Citron

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days N Citron 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.

Pair Trading with Taegu Broadcasting and N Citron

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

The idea behind Taegu Broadcasting and N Citron 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.