Correlation Between Youngsin Metal and Taegu Broadcasting
Can any of the company-specific risk be diversified away by investing in both Youngsin Metal and Taegu Broadcasting 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 Taegu Broadcasting 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 Taegu Broadcasting, you can compare the effects of market volatilities on Youngsin Metal and Taegu Broadcasting 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 Taegu Broadcasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngsin Metal and Taegu Broadcasting.
Diversification Opportunities for Youngsin Metal and Taegu Broadcasting
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Youngsin and Taegu is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Youngsin Metal Industrial and Taegu Broadcasting in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taegu Broadcasting 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 Taegu Broadcasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taegu Broadcasting has no effect on the direction of Youngsin Metal i.e., Youngsin Metal and Taegu Broadcasting go up and down completely randomly.
Pair Corralation between Youngsin Metal and Taegu Broadcasting
Assuming the 90 days trading horizon Youngsin Metal Industrial is expected to generate 1.51 times more return on investment than Taegu Broadcasting. However, Youngsin Metal is 1.51 times more volatile than Taegu Broadcasting. It trades about -0.01 of its potential returns per unit of risk. Taegu Broadcasting is currently generating about -0.04 per unit of risk. If you would invest 277,000 in Youngsin Metal Industrial on September 2, 2024 and sell it today you would lose (59,000) from holding Youngsin Metal Industrial or give up 21.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youngsin Metal Industrial vs. Taegu Broadcasting
Performance |
| Timeline |
| Youngsin Metal Industrial |
| Taegu Broadcasting |
Youngsin Metal and Taegu Broadcasting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngsin Metal and Taegu Broadcasting
The main advantage of trading using opposite Youngsin Metal and Taegu Broadcasting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngsin Metal position performs unexpectedly, Taegu Broadcasting 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 Taegu Broadcasting will offset losses from the drop in Taegu Broadcasting's long position.| Youngsin Metal vs. Digital Power Communications | Youngsin Metal vs. Iljin Display | Youngsin Metal vs. Lake Materials Co | Youngsin Metal vs. National Plastic Co |
| Taegu Broadcasting vs. AfreecaTV Co | Taegu Broadcasting vs. Seegene | Taegu Broadcasting vs. SS TECH | Taegu Broadcasting vs. Busan Industrial 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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