Correlation Between TS Investment and Naver

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

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

Diversification Opportunities for TS Investment and Naver

-0.74

Correlation Coefficient

TS Investment  Naver

Pay attention - limited upside

The 3 months correlation between 246690 and Naver is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding TS Investment Corp and Naver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naver and TS Investment 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 TS Investment Corp are associated (or correlated) with Naver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naver has no effect on the direction of TS Investment i.e., TS Investment and Naver go up and down completely randomly.

Pair Corralation between TS Investment and Naver

Assuming the 90 days trading horizon TS Investment is expected to generate 3.76 times less return on investment than Naver. In addition to that, TS Investment is 1.68 times more volatile than Naver. It trades about 0.04 of its total potential returns per unit of risk. Naver is currently generating about 0.23 per unit of volatility. If you would invest  16,010,000  in Naver on September 13, 2024 and sell it today you would earn a total of  4,790,000  from holding Naver or generate 29.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.31%
Values	Daily Returns

TS Investment Corp  vs.  Naver

TS Investment Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TS Investment Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, TS Investment may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Naver

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Naver are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Naver sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TS Investment and Naver

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

The idea behind TS Investment Corp and Naver 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.