Correlation Between Youngsin Metal and Daewoo Shipbuilding
Can any of the company-specific risk be diversified away by investing in both Youngsin Metal and Daewoo Shipbuilding 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 Daewoo Shipbuilding 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 Daewoo Shipbuilding, you can compare the effects of market volatilities on Youngsin Metal and Daewoo Shipbuilding 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 Daewoo Shipbuilding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngsin Metal and Daewoo Shipbuilding.
Diversification Opportunities for Youngsin Metal and Daewoo Shipbuilding
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Youngsin and Daewoo is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Youngsin Metal Industrial and Daewoo Shipbuilding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewoo Shipbuilding 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 Daewoo Shipbuilding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewoo Shipbuilding has no effect on the direction of Youngsin Metal i.e., Youngsin Metal and Daewoo Shipbuilding go up and down completely randomly.
Pair Corralation between Youngsin Metal and Daewoo Shipbuilding
Assuming the 90 days trading horizon Youngsin Metal Industrial is expected to under-perform the Daewoo Shipbuilding. But the stock apears to be less risky and, when comparing its historical volatility, Youngsin Metal Industrial is 3.11 times less risky than Daewoo Shipbuilding. The stock trades about -0.16 of its potential returns per unit of risk. The Daewoo Shipbuilding is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 5,720,000 in Daewoo Shipbuilding on November 28, 2024 and sell it today you would earn a total of 1,800,000 from holding Daewoo Shipbuilding or generate 31.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youngsin Metal Industrial vs. Daewoo Shipbuilding
Performance |
| Timeline |
| Youngsin Metal Industrial |
| Daewoo Shipbuilding |
Youngsin Metal and Daewoo Shipbuilding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngsin Metal and Daewoo Shipbuilding
The main advantage of trading using opposite Youngsin Metal and Daewoo Shipbuilding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngsin Metal position performs unexpectedly, Daewoo Shipbuilding 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 Daewoo Shipbuilding will offset losses from the drop in Daewoo Shipbuilding's long position.| Youngsin Metal vs. JYP Entertainment Corp | Youngsin Metal vs. BooKook Steel Co | Youngsin Metal vs. Insun Environment New | Youngsin Metal vs. Hironic Co |
| Daewoo Shipbuilding vs. Hana Technology Co | Daewoo Shipbuilding vs. ADTechnology CoLtd | Daewoo Shipbuilding vs. SungMoon Electronics Co | Daewoo Shipbuilding vs. Guyoung Technology 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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