Correlation Between Taeyang Metal and Youngsin Metal
Can any of the company-specific risk be diversified away by investing in both Taeyang Metal 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 Taeyang Metal and Youngsin Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taeyang Metal Industrial and Youngsin Metal Industrial, you can compare the effects of market volatilities on Taeyang Metal 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 Taeyang Metal with a short position of Youngsin Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taeyang Metal and Youngsin Metal.
Diversification Opportunities for Taeyang Metal and Youngsin Metal
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Taeyang and Youngsin is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Taeyang Metal Industrial 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 Taeyang Metal 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 Taeyang Metal Industrial 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 Taeyang Metal i.e., Taeyang Metal and Youngsin Metal go up and down completely randomly.
Pair Corralation between Taeyang Metal and Youngsin Metal
Assuming the 90 days trading horizon Taeyang Metal Industrial is expected to generate 1.51 times more return on investment than Youngsin Metal. However, Taeyang Metal is 1.51 times more volatile than Youngsin Metal Industrial. It trades about -0.14 of its potential returns per unit of risk. Youngsin Metal Industrial is currently generating about -0.6 per unit of risk. If you would invest 519,000 in Taeyang Metal Industrial on August 27, 2024 and sell it today you would lose (54,000) from holding Taeyang Metal Industrial or give up 10.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taeyang Metal Industrial vs. Youngsin Metal Industrial
Performance |
| Timeline |
| Taeyang Metal Industrial |
| Youngsin Metal Industrial |
Taeyang Metal and Youngsin Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taeyang Metal and Youngsin Metal
The main advantage of trading using opposite Taeyang Metal and Youngsin Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taeyang Metal 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.| Taeyang Metal vs. AptaBio Therapeutics | Taeyang Metal vs. Daewoo SBI SPAC | Taeyang Metal vs. Dream Security co | Taeyang Metal vs. Microfriend |
| Youngsin Metal vs. Samsung Electronics Co | Youngsin Metal vs. Samsung Electronics Co | Youngsin Metal vs. Hyundai Motor Co | Youngsin Metal vs. Hyundai Motor |
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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