Correlation Between Youngsin Metal and Daejung Chemicals
Can any of the company-specific risk be diversified away by investing in both Youngsin Metal and Daejung Chemicals 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 Daejung Chemicals 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 Daejung Chemicals Metals, you can compare the effects of market volatilities on Youngsin Metal and Daejung Chemicals 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 Daejung Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngsin Metal and Daejung Chemicals.
Diversification Opportunities for Youngsin Metal and Daejung Chemicals
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Youngsin and Daejung is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Youngsin Metal Industrial and Daejung Chemicals Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daejung Chemicals Metals 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 Daejung Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daejung Chemicals Metals has no effect on the direction of Youngsin Metal i.e., Youngsin Metal and Daejung Chemicals go up and down completely randomly.
Pair Corralation between Youngsin Metal and Daejung Chemicals
Assuming the 90 days trading horizon Youngsin Metal Industrial is expected to generate 1.1 times more return on investment than Daejung Chemicals. However, Youngsin Metal is 1.1 times more volatile than Daejung Chemicals Metals. It trades about -0.01 of its potential returns per unit of risk. Daejung Chemicals Metals is currently generating about -0.01 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 Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youngsin Metal Industrial vs. Daejung Chemicals Metals
Performance |
| Timeline |
| Youngsin Metal Industrial |
| Daejung Chemicals Metals |
Youngsin Metal and Daejung Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngsin Metal and Daejung Chemicals
The main advantage of trading using opposite Youngsin Metal and Daejung Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngsin Metal position performs unexpectedly, Daejung Chemicals 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 Daejung Chemicals will offset losses from the drop in Daejung Chemicals' 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 |
| Daejung Chemicals vs. Miwon Chemicals Co | Daejung Chemicals vs. Display Tech Co | Daejung Chemicals vs. Sung Bo Chemicals | Daejung Chemicals vs. Iljin Display |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |