Correlation Between Taylor Maritime and Weiss Korea

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

By analyzing existing cross correlation between Taylor Maritime Investments and Weiss Korea Opportunity, you can compare the effects of market volatilities on Taylor Maritime and Weiss Korea 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 Taylor Maritime with a short position of Weiss Korea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taylor Maritime and Weiss Korea.

Diversification Opportunities for Taylor Maritime and Weiss Korea

0.37

Correlation Coefficient

Taylor Maritime  Weiss Korea

Weak diversification

The 3 months correlation between Taylor and Weiss is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Taylor Maritime Investments and Weiss Korea Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weiss Korea Opportunity and Taylor Maritime 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 Taylor Maritime Investments are associated (or correlated) with Weiss Korea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weiss Korea Opportunity has no effect on the direction of Taylor Maritime i.e., Taylor Maritime and Weiss Korea go up and down completely randomly.

Pair Corralation between Taylor Maritime and Weiss Korea

Assuming the 90 days trading horizon Taylor Maritime Investments is expected to under-perform the Weiss Korea. But the stock apears to be less risky and, when comparing its historical volatility, Taylor Maritime Investments is 1.63 times less risky than Weiss Korea. The stock trades about -0.01 of its potential returns per unit of risk. The Weiss Korea Opportunity is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  15,900  in Weiss Korea Opportunity on October 6, 2024 and sell it today you would lose (151.00) from holding Weiss Korea Opportunity or give up 0.95% of portfolio value over 90 days.

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

Taylor Maritime Investments  vs.  Weiss Korea Opportunity

Taylor Maritime Inve

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Taylor Maritime Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Taylor Maritime is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Weiss Korea Opportunity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Weiss Korea Opportunity has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Weiss Korea is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Taylor Maritime and Weiss Korea

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

The idea behind Taylor Maritime Investments and Weiss Korea Opportunity 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.