Correlation Between Taewoong Logistics and OliX PharmaceuticalsI

Can any of the company-specific risk be diversified away by investing in both Taewoong Logistics and OliX PharmaceuticalsI 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 Taewoong Logistics and OliX PharmaceuticalsI into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Taewoong Logistics CoLtd and OliX PharmaceuticalsInc, you can compare the effects of market volatilities on Taewoong Logistics and OliX PharmaceuticalsI 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 Taewoong Logistics with a short position of OliX PharmaceuticalsI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taewoong Logistics and OliX PharmaceuticalsI.

Diversification Opportunities for Taewoong Logistics and OliX PharmaceuticalsI

-0.58

Correlation Coefficient

Taewoong Logistics  OliX PharmaceuticalsI

Excellent diversification

The 3 months correlation between Taewoong and OliX is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Taewoong Logistics CoLtd and OliX PharmaceuticalsInc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OliX PharmaceuticalsInc and Taewoong Logistics 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 Taewoong Logistics CoLtd are associated (or correlated) with OliX PharmaceuticalsI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OliX PharmaceuticalsInc has no effect on the direction of Taewoong Logistics i.e., Taewoong Logistics and OliX PharmaceuticalsI go up and down completely randomly.

Pair Corralation between Taewoong Logistics and OliX PharmaceuticalsI

Assuming the 90 days trading horizon Taewoong Logistics CoLtd is expected to generate 0.33 times more return on investment than OliX PharmaceuticalsI. However, Taewoong Logistics CoLtd is 3.07 times less risky than OliX PharmaceuticalsI. It trades about 0.06 of its potential returns per unit of risk. OliX PharmaceuticalsInc is currently generating about -0.15 per unit of risk. If you would invest  276,239  in Taewoong Logistics CoLtd on October 24, 2024 and sell it today you would earn a total of  17,761  from holding Taewoong Logistics CoLtd or generate 6.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Taewoong Logistics CoLtd  vs.  OliX PharmaceuticalsInc

Taewoong Logistics CoLtd

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Taewoong Logistics CoLtd are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Taewoong Logistics may actually be approaching a critical reversion point that can send shares even higher in February 2025.

OliX PharmaceuticalsInc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OliX PharmaceuticalsInc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Taewoong Logistics and OliX PharmaceuticalsI

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

The idea behind Taewoong Logistics CoLtd and OliX PharmaceuticalsInc 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.