Correlation Between Youngsin Metal and Sewoon Medical
Can any of the company-specific risk be diversified away by investing in both Youngsin Metal and Sewoon Medical 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 Sewoon Medical 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 Sewoon Medical Co, you can compare the effects of market volatilities on Youngsin Metal and Sewoon Medical 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 Sewoon Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngsin Metal and Sewoon Medical.
Diversification Opportunities for Youngsin Metal and Sewoon Medical
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Youngsin and Sewoon is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Youngsin Metal Industrial and Sewoon Medical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sewoon Medical 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 Sewoon Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sewoon Medical has no effect on the direction of Youngsin Metal i.e., Youngsin Metal and Sewoon Medical go up and down completely randomly.
Pair Corralation between Youngsin Metal and Sewoon Medical
Assuming the 90 days trading horizon Youngsin Metal Industrial is expected to under-perform the Sewoon Medical. In addition to that, Youngsin Metal is 1.72 times more volatile than Sewoon Medical Co. It trades about -0.31 of its total potential returns per unit of risk. Sewoon Medical Co is currently generating about -0.13 per unit of volatility. If you would invest 271,000 in Sewoon Medical Co on August 28, 2024 and sell it today you would lose (14,000) from holding Sewoon Medical Co or give up 5.17% 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. Sewoon Medical Co
Performance |
| Timeline |
| Youngsin Metal Industrial |
| Sewoon Medical |
Youngsin Metal and Sewoon Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngsin Metal and Sewoon Medical
The main advantage of trading using opposite Youngsin Metal and Sewoon Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngsin Metal position performs unexpectedly, Sewoon Medical 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 Sewoon Medical will offset losses from the drop in Sewoon Medical's long position.| Youngsin Metal vs. Kbi Metal Co | Youngsin Metal vs. Shinhan Inverse Silver | Youngsin Metal vs. Busan Industrial Co | Youngsin Metal vs. Aprogen Healthcare Games |
| Sewoon Medical vs. Medy Tox | Sewoon Medical vs. Busan Industrial Co | Sewoon Medical vs. Busan Ind | Sewoon Medical vs. Mirae Asset Daewoo |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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