Correlation Between Taewoong Logistics and UNISEM

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

By analyzing existing cross correlation between Taewoong Logistics CoLtd and UNISEM Co, you can compare the effects of market volatilities on Taewoong Logistics and UNISEM 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 Taewoong Logistics with a short position of UNISEM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taewoong Logistics and UNISEM.

Diversification Opportunities for Taewoong Logistics and UNISEM

0.57

Correlation Coefficient

Taewoong Logistics  UNISEM

Very weak diversification

The 3 months correlation between Taewoong and UNISEM is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Taewoong Logistics CoLtd and UNISEM Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNISEM and Taewoong Logistics 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 Taewoong Logistics CoLtd are associated (or correlated) with UNISEM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNISEM has no effect on the direction of Taewoong Logistics i.e., Taewoong Logistics and UNISEM go up and down completely randomly.

Pair Corralation between Taewoong Logistics and UNISEM

Assuming the 90 days trading horizon Taewoong Logistics CoLtd is expected to generate 1.05 times more return on investment than UNISEM. However, Taewoong Logistics is 1.05 times more volatile than UNISEM Co. It trades about -0.03 of its potential returns per unit of risk. UNISEM Co is currently generating about -0.03 per unit of risk. If you would invest  320,000  in Taewoong Logistics CoLtd on September 21, 2024 and sell it today you would lose (31,000) from holding Taewoong Logistics CoLtd or give up 9.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Taewoong Logistics CoLtd  vs.  UNISEM Co

Taewoong Logistics CoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Taewoong Logistics CoLtd 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.

UNISEM

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UNISEM 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 Taewoong Logistics and UNISEM

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

The idea behind Taewoong Logistics CoLtd and UNISEM 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.