Correlation Between Youngsin Metal and EBEST Investment
Can any of the company-specific risk be diversified away by investing in both Youngsin Metal and EBEST Investment 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 EBEST Investment 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 EBEST Investment Securities, you can compare the effects of market volatilities on Youngsin Metal and EBEST Investment 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 EBEST Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngsin Metal and EBEST Investment.
Diversification Opportunities for Youngsin Metal and EBEST Investment
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Youngsin and EBEST is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Youngsin Metal Industrial and EBEST Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBEST Investment Sec 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 EBEST Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EBEST Investment Sec has no effect on the direction of Youngsin Metal i.e., Youngsin Metal and EBEST Investment go up and down completely randomly.
Pair Corralation between Youngsin Metal and EBEST Investment
Assuming the 90 days trading horizon Youngsin Metal Industrial is expected to generate 1.28 times more return on investment than EBEST Investment. However, Youngsin Metal is 1.28 times more volatile than EBEST Investment Securities. It trades about -0.01 of its potential returns per unit of risk. EBEST Investment Securities is currently generating about -0.02 per unit of risk. If you would invest 288,500 in Youngsin Metal Industrial on October 15, 2024 and sell it today you would lose (68,000) from holding Youngsin Metal Industrial or give up 23.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youngsin Metal Industrial vs. EBEST Investment Securities
Performance |
| Timeline |
| Youngsin Metal Industrial |
| EBEST Investment Sec |
Youngsin Metal and EBEST Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngsin Metal and EBEST Investment
The main advantage of trading using opposite Youngsin Metal and EBEST Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngsin Metal position performs unexpectedly, EBEST Investment 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 EBEST Investment will offset losses from the drop in EBEST Investment's long position.| Youngsin Metal vs. SeAH Besteel Corp | Youngsin Metal vs. Shinil Electronics Co | Youngsin Metal vs. Korea Electronic Certification | Youngsin Metal vs. INSUN Environmental New |
| EBEST Investment vs. Pureun Mutual Savings | EBEST Investment vs. Seoul Food Industrial | EBEST Investment vs. KTB Investment Securities | EBEST Investment vs. Foodnamoo |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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