Correlation Between Dongbang Transport and Youngbo Chemical
Can any of the company-specific risk be diversified away by investing in both Dongbang Transport and Youngbo 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 Dongbang Transport and Youngbo Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongbang Transport Logistics and Youngbo Chemical Co, you can compare the effects of market volatilities on Dongbang Transport and Youngbo 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 Dongbang Transport with a short position of Youngbo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Transport and Youngbo Chemical.
Diversification Opportunities for Dongbang Transport and Youngbo Chemical
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dongbang and Youngbo is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Transport Logistics and Youngbo Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngbo Chemical and Dongbang Transport 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 Dongbang Transport Logistics are associated (or correlated) with Youngbo Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youngbo Chemical has no effect on the direction of Dongbang Transport i.e., Dongbang Transport and Youngbo Chemical go up and down completely randomly.
Pair Corralation between Dongbang Transport and Youngbo Chemical
Assuming the 90 days trading horizon Dongbang Transport Logistics is expected to generate 0.97 times more return on investment than Youngbo Chemical. However, Dongbang Transport Logistics is 1.03 times less risky than Youngbo Chemical. It trades about 0.25 of its potential returns per unit of risk. Youngbo Chemical Co is currently generating about 0.14 per unit of risk. If you would invest 216,000 in Dongbang Transport Logistics on October 13, 2024 and sell it today you would earn a total of 13,500 from holding Dongbang Transport Logistics or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbang Transport Logistics vs. Youngbo Chemical Co
Performance |
| Timeline |
| Dongbang Transport |
| Youngbo Chemical |
Dongbang Transport and Youngbo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Transport and Youngbo Chemical
The main advantage of trading using opposite Dongbang Transport and Youngbo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Transport position performs unexpectedly, Youngbo 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 Youngbo Chemical will offset losses from the drop in Youngbo Chemical's long position.| Dongbang Transport vs. Hwangkum Steel Technology | Dongbang Transport vs. Asia Technology Co | Dongbang Transport vs. BIT Computer Co | Dongbang Transport vs. PJ Electronics Co |
| Youngbo Chemical vs. Youngsin Metal Industrial | Youngbo Chemical vs. Dongbang Transport Logistics | Youngbo Chemical vs. Formetal Co | Youngbo Chemical vs. Kbi Metal 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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