Correlation Between TK Chemical and Hankukpackage

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

By analyzing existing cross correlation between TK Chemical and Hankukpackage Co, you can compare the effects of market volatilities on TK Chemical and Hankukpackage 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 Hankukpackage. Check out your portfolio center. Please also check ongoing floating volatility patterns of TK Chemical and Hankukpackage.

Diversification Opportunities for TK Chemical and Hankukpackage

-0.08

Correlation Coefficient

TK Chemical  Hankukpackage

Good diversification

The 3 months correlation between 104480 and Hankukpackage is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding TK Chemical and Hankukpackage Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hankukpackage 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 Hankukpackage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hankukpackage has no effect on the direction of TK Chemical i.e., TK Chemical and Hankukpackage go up and down completely randomly.

Pair Corralation between TK Chemical and Hankukpackage

Assuming the 90 days trading horizon TK Chemical is expected to generate 2.0 times more return on investment than Hankukpackage. However, TK Chemical is 2.0 times more volatile than Hankukpackage Co. It trades about 0.1 of its potential returns per unit of risk. Hankukpackage Co is currently generating about -0.05 per unit of risk. If you would invest  144,500  in TK Chemical on September 30, 2024 and sell it today you would earn a total of  35,400  from holding TK Chemical or generate 24.5% return on investment over 90 days.

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

TK Chemical  vs.  Hankukpackage Co

TK Chemical

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TK Chemical are ranked lower than 8 (%) 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.

Hankukpackage

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hankukpackage Co 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 Hankukpackage

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

The idea behind TK Chemical and Hankukpackage 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.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .