Correlation Between Young Poong and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Young Poong and Dow Jones 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 Young Poong and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Young Poong Corp and Dow Jones Industrial, you can compare the effects of market volatilities on Young Poong and Dow Jones 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 Young Poong with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Young Poong and Dow Jones.
Diversification Opportunities for Young Poong and Dow Jones
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Young and Dow is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Young Poong Corp and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Young Poong 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 Young Poong Corp are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Young Poong i.e., Young Poong and Dow Jones go up and down completely randomly.
Pair Corralation between Young Poong and Dow Jones
Assuming the 90 days trading horizon Young Poong Corp is expected to generate 1.7 times more return on investment than Dow Jones. However, Young Poong is 1.7 times more volatile than Dow Jones Industrial. It trades about 0.06 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.26 per unit of risk. If you would invest 38,481,900 in Young Poong Corp on October 14, 2024 and sell it today you would earn a total of 518,100 from holding Young Poong Corp or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Young Poong Corp vs. Dow Jones Industrial
Performance |
| Timeline |
Young Poong and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Young Poong Corp
Pair trading matchups for Young Poong
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Young Poong and Dow Jones
The main advantage of trading using opposite Young Poong and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Young Poong position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Young Poong vs. Nable Communications | Young Poong vs. Daejung Chemicals Metals | Young Poong vs. Korea Information Communications | Young Poong vs. Automobile Pc |
| Dow Jones vs. Chipotle Mexican Grill | Dow Jones vs. Teleflex Incorporated | Dow Jones vs. Dine Brands Global | Dow Jones vs. Alvotech |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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