Correlation Between Cafe24 Corp and THiRA-UTECH
Can any of the company-specific risk be diversified away by investing in both Cafe24 Corp and THiRA-UTECH 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 Cafe24 Corp and THiRA-UTECH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cafe24 Corp and THiRA UTECH LTD, you can compare the effects of market volatilities on Cafe24 Corp and THiRA-UTECH 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 Cafe24 Corp with a short position of THiRA-UTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cafe24 Corp and THiRA-UTECH.
Diversification Opportunities for Cafe24 Corp and THiRA-UTECH
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cafe24 and THiRA-UTECH is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Cafe24 Corp and THiRA UTECH LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THiRA UTECH LTD and Cafe24 Corp 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 Cafe24 Corp are associated (or correlated) with THiRA-UTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THiRA UTECH LTD has no effect on the direction of Cafe24 Corp i.e., Cafe24 Corp and THiRA-UTECH go up and down completely randomly.
Pair Corralation between Cafe24 Corp and THiRA-UTECH
Assuming the 90 days trading horizon Cafe24 Corp is expected to generate 1.48 times more return on investment than THiRA-UTECH. However, Cafe24 Corp is 1.48 times more volatile than THiRA UTECH LTD. It trades about 0.08 of its potential returns per unit of risk. THiRA UTECH LTD is currently generating about -0.03 per unit of risk. If you would invest 3,010,000 in Cafe24 Corp on September 13, 2024 and sell it today you would earn a total of 445,000 from holding Cafe24 Corp or generate 14.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Cafe24 Corp vs. THiRA UTECH LTD
Performance |
Timeline |
Cafe24 Corp |
THiRA UTECH LTD |
Cafe24 Corp and THiRA-UTECH Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cafe24 Corp and THiRA-UTECH
The main advantage of trading using opposite Cafe24 Corp and THiRA-UTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cafe24 Corp position performs unexpectedly, THiRA-UTECH 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 THiRA-UTECH will offset losses from the drop in THiRA-UTECH's long position.Cafe24 Corp vs. LG Household Healthcare | Cafe24 Corp vs. Dong A Steel Technology | Cafe24 Corp vs. Lotte Data Communication | Cafe24 Corp vs. Nice Information Telecommunication |
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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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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