Correlation Between Daehan Synthetic and Youngchang Chemical
Can any of the company-specific risk be diversified away by investing in both Daehan Synthetic and Youngchang Chemical 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 Daehan Synthetic and Youngchang Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daehan Synthetic Fiber and Youngchang Chemical Co, you can compare the effects of market volatilities on Daehan Synthetic and Youngchang Chemical 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 Daehan Synthetic with a short position of Youngchang Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daehan Synthetic and Youngchang Chemical.
Diversification Opportunities for Daehan Synthetic and Youngchang Chemical
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Daehan and Youngchang is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Daehan Synthetic Fiber and Youngchang Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngchang Chemical and Daehan Synthetic 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 Daehan Synthetic Fiber are associated (or correlated) with Youngchang Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youngchang Chemical has no effect on the direction of Daehan Synthetic i.e., Daehan Synthetic and Youngchang Chemical go up and down completely randomly.
Pair Corralation between Daehan Synthetic and Youngchang Chemical
Assuming the 90 days trading horizon Daehan Synthetic Fiber is expected to generate 0.22 times more return on investment than Youngchang Chemical. However, Daehan Synthetic Fiber is 4.6 times less risky than Youngchang Chemical. It trades about -0.08 of its potential returns per unit of risk. Youngchang Chemical Co is currently generating about -0.3 per unit of risk. If you would invest 11,800,000 in Daehan Synthetic Fiber on September 4, 2024 and sell it today you would lose (150,000) from holding Daehan Synthetic Fiber or give up 1.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daehan Synthetic Fiber vs. Youngchang Chemical Co
Performance |
| Timeline |
| Daehan Synthetic Fiber |
| Youngchang Chemical |
Daehan Synthetic and Youngchang Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daehan Synthetic and Youngchang Chemical
The main advantage of trading using opposite Daehan Synthetic and Youngchang Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daehan Synthetic position performs unexpectedly, Youngchang Chemical 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 Youngchang Chemical will offset losses from the drop in Youngchang Chemical's long position.| Daehan Synthetic vs. LG Display Co | Daehan Synthetic vs. Sangsin Energy Display | Daehan Synthetic vs. Okins Electronics Co | Daehan Synthetic vs. Visang Education |
| Youngchang Chemical vs. LG Chem | Youngchang Chemical vs. DukSan Neolux CoLtd | Youngchang Chemical vs. LIG ES SPAC | Youngchang Chemical vs. Sukgyung AT Co |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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