Correlation Between Youngsin Metal and Seoul Food
Can any of the company-specific risk be diversified away by investing in both Youngsin Metal and Seoul Food 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 Youngsin Metal and Seoul Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Youngsin Metal Industrial and Seoul Food Industrial, you can compare the effects of market volatilities on Youngsin Metal and Seoul Food 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 Youngsin Metal with a short position of Seoul Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngsin Metal and Seoul Food.
Diversification Opportunities for Youngsin Metal and Seoul Food
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Youngsin and Seoul is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Youngsin Metal Industrial and Seoul Food Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoul Food Industrial and Youngsin 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 Youngsin Metal Industrial are associated (or correlated) with Seoul Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoul Food Industrial has no effect on the direction of Youngsin Metal i.e., Youngsin Metal and Seoul Food go up and down completely randomly.
Pair Corralation between Youngsin Metal and Seoul Food
Assuming the 90 days trading horizon Youngsin Metal Industrial is expected to generate 1.81 times more return on investment than Seoul Food. However, Youngsin Metal is 1.81 times more volatile than Seoul Food Industrial. It trades about -0.03 of its potential returns per unit of risk. Seoul Food Industrial is currently generating about -0.08 per unit of risk. If you would invest 279,500 in Youngsin Metal Industrial on October 29, 2024 and sell it today you would lose (57,500) from holding Youngsin Metal Industrial or give up 20.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youngsin Metal Industrial vs. Seoul Food Industrial
Performance |
| Timeline |
| Youngsin Metal Industrial |
| Seoul Food Industrial |
Youngsin Metal and Seoul Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngsin Metal and Seoul Food
The main advantage of trading using opposite Youngsin Metal and Seoul Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngsin Metal position performs unexpectedly, Seoul Food 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 Seoul Food will offset losses from the drop in Seoul Food's long position.| Youngsin Metal vs. Dongbu Insurance Co | Youngsin Metal vs. Daiyang Metal Co | Youngsin Metal vs. Samlip General Foods | Youngsin Metal vs. Heungkuk Metaltech CoLtd |
| Seoul Food vs. KB Financial Group | Seoul Food vs. Shinhan Financial Group | Seoul Food vs. Hana Financial | Seoul Food vs. Woori Financial Group |
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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