Correlation Between Yuhan and PlayD
Can any of the company-specific risk be diversified away by investing in both Yuhan and PlayD 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 Yuhan and PlayD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yuhan and PlayD Co, you can compare the effects of market volatilities on Yuhan and PlayD 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 Yuhan with a short position of PlayD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuhan and PlayD.
Diversification Opportunities for Yuhan and PlayD
Very weak diversification
The 3 months correlation between Yuhan and PlayD is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Yuhan and PlayD Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PlayD and Yuhan 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 Yuhan are associated (or correlated) with PlayD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PlayD has no effect on the direction of Yuhan i.e., Yuhan and PlayD go up and down completely randomly.
Pair Corralation between Yuhan and PlayD
Assuming the 90 days trading horizon Yuhan is expected to generate 1.0 times more return on investment than PlayD. However, Yuhan is 1.0 times less risky than PlayD. It trades about 0.18 of its potential returns per unit of risk. PlayD Co is currently generating about 0.16 per unit of risk. If you would invest 11,830,000 in Yuhan on November 2, 2024 and sell it today you would earn a total of 1,130,000 from holding Yuhan or generate 9.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuhan vs. PlayD Co
Performance |
| Timeline |
| Yuhan |
| PlayD |
Yuhan and PlayD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuhan and PlayD
The main advantage of trading using opposite Yuhan and PlayD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuhan position performs unexpectedly, PlayD 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 PlayD will offset losses from the drop in PlayD's long position.| Yuhan vs. Dongil Metal Co | Yuhan vs. Heungkuk Metaltech CoLtd | Yuhan vs. Daishin Information Communications | Yuhan vs. SK Chemicals Co |
| PlayD vs. Hyosung Advanced Materials | PlayD vs. LS Materials | PlayD vs. INNOX Advanced Materials | PlayD vs. PI Advanced Materials |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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