Correlation Between Youngsin Metal and Dongil Metal
Can any of the company-specific risk be diversified away by investing in both Youngsin Metal and Dongil Metal 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 Dongil Metal 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 Dongil Metal Co, you can compare the effects of market volatilities on Youngsin Metal and Dongil Metal 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 Dongil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngsin Metal and Dongil Metal.
Diversification Opportunities for Youngsin Metal and Dongil Metal
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Youngsin and Dongil is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Youngsin Metal Industrial and Dongil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil Metal 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 Dongil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongil Metal has no effect on the direction of Youngsin Metal i.e., Youngsin Metal and Dongil Metal go up and down completely randomly.
Pair Corralation between Youngsin Metal and Dongil Metal
Assuming the 90 days trading horizon Youngsin Metal Industrial is expected to under-perform the Dongil Metal. In addition to that, Youngsin Metal is 4.28 times more volatile than Dongil Metal Co. It trades about -0.31 of its total potential returns per unit of risk. Dongil Metal Co is currently generating about -0.2 per unit of volatility. If you would invest 866,000 in Dongil Metal Co on August 28, 2024 and sell it today you would lose (26,000) from holding Dongil Metal Co or give up 3.0% 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. Dongil Metal Co
Performance |
| Timeline |
| Youngsin Metal Industrial |
| Dongil Metal |
Youngsin Metal and Dongil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngsin Metal and Dongil Metal
The main advantage of trading using opposite Youngsin Metal and Dongil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngsin Metal position performs unexpectedly, Dongil Metal 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 Dongil Metal will offset losses from the drop in Dongil Metal'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 |
| Dongil Metal vs. LG Chemicals | Dongil Metal vs. Lotte Chemical Corp | Dongil Metal vs. Hyundai Steel | Dongil Metal vs. Seah Steel Corp |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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