Correlation Between TS Investment and Daesung Hi

Can any of the company-specific risk be diversified away by investing in both TS Investment and Daesung Hi 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 Daesung Hi 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 Daesung Hi Tech Co, you can compare the effects of market volatilities on TS Investment and Daesung Hi 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 Daesung Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of TS Investment and Daesung Hi.

Diversification Opportunities for TS Investment and Daesung Hi

0.31

Correlation Coefficient

TS Investment  Daesung Hi

Weak diversification

The 3 months correlation between 246690 and Daesung is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding TS Investment Corp and Daesung Hi Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daesung Hi Tech 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 Daesung Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daesung Hi Tech has no effect on the direction of TS Investment i.e., TS Investment and Daesung Hi go up and down completely randomly.

Pair Corralation between TS Investment and Daesung Hi

Assuming the 90 days trading horizon TS Investment is expected to generate 1.37 times less return on investment than Daesung Hi. In addition to that, TS Investment is 1.03 times more volatile than Daesung Hi Tech Co. It trades about 0.07 of its total potential returns per unit of risk. Daesung Hi Tech Co is currently generating about 0.1 per unit of volatility. If you would invest  329,000  in Daesung Hi Tech Co on December 30, 2024 and sell it today you would earn a total of  90,000  from holding Daesung Hi Tech Co or generate 27.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

TS Investment Corp  vs.  Daesung Hi Tech Co

TS Investment Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TS Investment Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, TS Investment sustained solid returns over the last few months and may actually be approaching a breakup point.

Daesung Hi Tech

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Daesung Hi Tech Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Daesung Hi sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TS Investment and Daesung Hi

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

The idea behind TS Investment Corp and Daesung Hi Tech Co 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.