Correlation Between Tway Air and Young Poong

Can any of the company-specific risk be diversified away by investing in both Tway Air and Young Poong 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 Tway Air and Young Poong into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Tway Air and Young Poong

-0.27

Correlation Coefficient

Tway Air  Young Poong

Very good diversification

The 3 months correlation between Tway and Young is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Tway Air Co and Young Poong Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Young Poong Corp and Tway Air 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 Tway Air Co are associated (or correlated) with Young Poong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Young Poong Corp has no effect on the direction of Tway Air i.e., Tway Air and Young Poong go up and down completely randomly.

Pair Corralation between Tway Air and Young Poong

Assuming the 90 days trading horizon Tway Air Co is expected to under-perform the Young Poong. In addition to that, Tway Air is 1.94 times more volatile than Young Poong Corp. It trades about -0.01 of its total potential returns per unit of risk. Young Poong Corp is currently generating about 0.16 per unit of volatility. If you would invest  39,047,100  in Young Poong Corp on December 22, 2024 and sell it today you would earn a total of  8,952,900  from holding Young Poong Corp or generate 22.93% return on investment over 90 days.

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

Tway Air Co  vs.  Young Poong Corp

Tway Air

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tway Air Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Tway Air is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Young Poong Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Young Poong Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Young Poong sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tway Air and Young Poong

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

The idea behind Tway Air Co and Young Poong 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.

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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.