Correlation Between Youngsin Metal and Hansol Homedeco
Can any of the company-specific risk be diversified away by investing in both Youngsin Metal and Hansol Homedeco 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 Hansol Homedeco 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 Hansol Homedeco Co, you can compare the effects of market volatilities on Youngsin Metal and Hansol Homedeco 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 Hansol Homedeco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngsin Metal and Hansol Homedeco.
Diversification Opportunities for Youngsin Metal and Hansol Homedeco
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Youngsin and Hansol is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Youngsin Metal Industrial and Hansol Homedeco Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansol Homedeco 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 Hansol Homedeco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansol Homedeco has no effect on the direction of Youngsin Metal i.e., Youngsin Metal and Hansol Homedeco go up and down completely randomly.
Pair Corralation between Youngsin Metal and Hansol Homedeco
Assuming the 90 days trading horizon Youngsin Metal Industrial is expected to generate 1.41 times more return on investment than Hansol Homedeco. However, Youngsin Metal is 1.41 times more volatile than Hansol Homedeco Co. It trades about -0.01 of its potential returns per unit of risk. Hansol Homedeco Co is currently generating about -0.06 per unit of risk. If you would invest 295,500 in Youngsin Metal Industrial on September 19, 2024 and sell it today you would lose (36,500) from holding Youngsin Metal Industrial or give up 12.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youngsin Metal Industrial vs. Hansol Homedeco Co
Performance |
| Timeline |
| Youngsin Metal Industrial |
| Hansol Homedeco |
Youngsin Metal and Hansol Homedeco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngsin Metal and Hansol Homedeco
The main advantage of trading using opposite Youngsin Metal and Hansol Homedeco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngsin Metal position performs unexpectedly, Hansol Homedeco 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 Hansol Homedeco will offset losses from the drop in Hansol Homedeco's long position.| Youngsin Metal vs. Korea New Network | Youngsin Metal vs. Solution Advanced Technology | Youngsin Metal vs. Busan Industrial Co | Youngsin Metal vs. Busan Ind |
| Hansol Homedeco vs. Samsung Electronics Co | Hansol Homedeco vs. Samsung Electronics Co | Hansol Homedeco vs. SK Hynix | Hansol Homedeco vs. POSCO Holdings |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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