Correlation Between Tokai Carbon and Haesung DS
Can any of the company-specific risk be diversified away by investing in both Tokai Carbon and Haesung DS 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 Tokai Carbon and Haesung DS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tokai Carbon Korea and Haesung DS Co, you can compare the effects of market volatilities on Tokai Carbon and Haesung DS 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 Tokai Carbon with a short position of Haesung DS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tokai Carbon and Haesung DS.
Diversification Opportunities for Tokai Carbon and Haesung DS
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tokai and Haesung is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Tokai Carbon Korea and Haesung DS Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haesung DS and Tokai Carbon 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 Tokai Carbon Korea are associated (or correlated) with Haesung DS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haesung DS has no effect on the direction of Tokai Carbon i.e., Tokai Carbon and Haesung DS go up and down completely randomly.
Pair Corralation between Tokai Carbon and Haesung DS
Assuming the 90 days trading horizon Tokai Carbon Korea is expected to under-perform the Haesung DS. But the stock apears to be less risky and, when comparing its historical volatility, Tokai Carbon Korea is 1.31 times less risky than Haesung DS. The stock trades about -0.2 of its potential returns per unit of risk. The Haesung DS Co is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 2,695,000 in Haesung DS Co on September 5, 2024 and sell it today you would lose (560,000) from holding Haesung DS Co or give up 20.78% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Tokai Carbon Korea vs. Haesung DS Co
Performance |
Timeline |
Tokai Carbon Korea |
Haesung DS |
Tokai Carbon and Haesung DS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tokai Carbon and Haesung DS
The main advantage of trading using opposite Tokai Carbon and Haesung DS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tokai Carbon position performs unexpectedly, Haesung DS 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 Haesung DS will offset losses from the drop in Haesung DS's long position.Tokai Carbon vs. SK Hynix | Tokai Carbon vs. LX Semicon Co | Tokai Carbon vs. People Technology | Tokai Carbon vs. Hana Materials |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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