Correlation Between Bohae Brewery and Youngsin Metal
Can any of the company-specific risk be diversified away by investing in both Bohae Brewery and Youngsin Metal 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 Bohae Brewery and Youngsin Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bohae Brewery and Youngsin Metal Industrial, you can compare the effects of market volatilities on Bohae Brewery and Youngsin Metal 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 Bohae Brewery with a short position of Youngsin Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bohae Brewery and Youngsin Metal.
Diversification Opportunities for Bohae Brewery and Youngsin Metal
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bohae and Youngsin is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Bohae Brewery and Youngsin Metal Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngsin Metal Industrial and Bohae Brewery 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 Bohae Brewery are associated (or correlated) with Youngsin Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youngsin Metal Industrial has no effect on the direction of Bohae Brewery i.e., Bohae Brewery and Youngsin Metal go up and down completely randomly.
Pair Corralation between Bohae Brewery and Youngsin Metal
Assuming the 90 days trading horizon Bohae Brewery is expected to generate 2.55 times more return on investment than Youngsin Metal. However, Bohae Brewery is 2.55 times more volatile than Youngsin Metal Industrial. It trades about 0.07 of its potential returns per unit of risk. Youngsin Metal Industrial is currently generating about -0.31 per unit of risk. If you would invest 42,700 in Bohae Brewery on August 28, 2024 and sell it today you would earn a total of 3,000 from holding Bohae Brewery or generate 7.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bohae Brewery vs. Youngsin Metal Industrial
Performance |
| Timeline |
| Bohae Brewery |
| Youngsin Metal Industrial |
Bohae Brewery and Youngsin Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bohae Brewery and Youngsin Metal
The main advantage of trading using opposite Bohae Brewery and Youngsin Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bohae Brewery position performs unexpectedly, Youngsin Metal 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 Youngsin Metal will offset losses from the drop in Youngsin Metal's long position.| Bohae Brewery vs. Sam Yang Foods | Bohae Brewery vs. ZUM Internet Corp | Bohae Brewery vs. Inzi Display CoLtd | Bohae Brewery vs. CG Hi Tech |
| Youngsin Metal vs. Kbi Metal Co | Youngsin Metal vs. Shinhan Inverse Silver | Youngsin Metal vs. Busan Industrial Co | Youngsin Metal vs. Aprogen Healthcare Games |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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