Correlation Between TK Chemical and Kyung-In Synthetic

Can any of the company-specific risk be diversified away by investing in both TK Chemical and Kyung-In Synthetic 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 TK Chemical and Kyung-In Synthetic into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TK Chemical and Kyung In Synthetic Corp, you can compare the effects of market volatilities on TK Chemical and Kyung-In Synthetic 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 TK Chemical with a short position of Kyung-In Synthetic. Check out your portfolio center. Please also check ongoing floating volatility patterns of TK Chemical and Kyung-In Synthetic.

Diversification Opportunities for TK Chemical and Kyung-In Synthetic

0.48

Correlation Coefficient

TK Chemical  Kyung-In Synthetic

Very weak diversification

The 3 months correlation between 104480 and Kyung-In is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding TK Chemical and Kyung In Synthetic Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyung In Synthetic and TK Chemical 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 TK Chemical are associated (or correlated) with Kyung-In Synthetic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyung In Synthetic has no effect on the direction of TK Chemical i.e., TK Chemical and Kyung-In Synthetic go up and down completely randomly.

Pair Corralation between TK Chemical and Kyung-In Synthetic

Assuming the 90 days trading horizon TK Chemical is expected to generate 2.52 times more return on investment than Kyung-In Synthetic. However, TK Chemical is 2.52 times more volatile than Kyung In Synthetic Corp. It trades about 0.13 of its potential returns per unit of risk. Kyung In Synthetic Corp is currently generating about -0.12 per unit of risk. If you would invest  134,800  in TK Chemical on September 22, 2024 and sell it today you would earn a total of  46,800  from holding TK Chemical or generate 34.72% return on investment over 90 days.

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

TK Chemical  vs.  Kyung In Synthetic Corp

TK Chemical

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TK Chemical are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, TK Chemical sustained solid returns over the last few months and may actually be approaching a breakup point.

Kyung In Synthetic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kyung In Synthetic Corp 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 TK Chemical and Kyung-In Synthetic

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

The idea behind TK Chemical and Kyung In Synthetic Corp 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.

Check out your portfolio center.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.