Correlation Between Tamul Multimedia and WOOJUNG BIO

Can any of the company-specific risk be diversified away by investing in both Tamul Multimedia and WOOJUNG BIO 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 Tamul Multimedia and WOOJUNG BIO into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tamul Multimedia Co and WOOJUNG BIO, you can compare the effects of market volatilities on Tamul Multimedia and WOOJUNG BIO 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 Tamul Multimedia with a short position of WOOJUNG BIO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tamul Multimedia and WOOJUNG BIO.

Diversification Opportunities for Tamul Multimedia and WOOJUNG BIO

0.65

Correlation Coefficient

Tamul Multimedia  WOOJUNG BIO

Poor diversification

The 3 months correlation between Tamul and WOOJUNG is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Tamul Multimedia Co and WOOJUNG BIO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WOOJUNG BIO and Tamul Multimedia 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 Tamul Multimedia Co are associated (or correlated) with WOOJUNG BIO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WOOJUNG BIO has no effect on the direction of Tamul Multimedia i.e., Tamul Multimedia and WOOJUNG BIO go up and down completely randomly.

Pair Corralation between Tamul Multimedia and WOOJUNG BIO

Assuming the 90 days trading horizon Tamul Multimedia is expected to generate 4.02 times less return on investment than WOOJUNG BIO. But when comparing it to its historical volatility, Tamul Multimedia Co is 1.27 times less risky than WOOJUNG BIO. It trades about 0.0 of its potential returns per unit of risk. WOOJUNG BIO is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  289,500  in WOOJUNG BIO on October 11, 2024 and sell it today you would lose (97,300) from holding WOOJUNG BIO or give up 33.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.79%
Values	Daily Returns

Tamul Multimedia Co  vs.  WOOJUNG BIO

Tamul Multimedia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tamul Multimedia 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.

WOOJUNG BIO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WOOJUNG BIO 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 Tamul Multimedia and WOOJUNG BIO

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

The idea behind Tamul Multimedia Co and WOOJUNG BIO 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..