Correlation Between Youngsin Metal and Digital Multimedia
Can any of the company-specific risk be diversified away by investing in both Youngsin Metal and Digital Multimedia 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 Digital Multimedia 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 Digital Multimedia Technology, you can compare the effects of market volatilities on Youngsin Metal and Digital Multimedia 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 Digital Multimedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngsin Metal and Digital Multimedia.
Diversification Opportunities for Youngsin Metal and Digital Multimedia
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Youngsin and Digital is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Youngsin Metal Industrial and Digital Multimedia Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Multimedia 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 Digital Multimedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Multimedia has no effect on the direction of Youngsin Metal i.e., Youngsin Metal and Digital Multimedia go up and down completely randomly.
Pair Corralation between Youngsin Metal and Digital Multimedia
Assuming the 90 days trading horizon Youngsin Metal Industrial is expected to generate 0.61 times more return on investment than Digital Multimedia. However, Youngsin Metal Industrial is 1.65 times less risky than Digital Multimedia. It trades about -0.05 of its potential returns per unit of risk. Digital Multimedia Technology is currently generating about -0.11 per unit of risk. If you would invest 280,000 in Youngsin Metal Industrial on September 2, 2024 and sell it today you would lose (62,000) from holding Youngsin Metal Industrial or give up 22.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.39% |
| Values | Daily Returns |
Youngsin Metal Industrial vs. Digital Multimedia Technology
Performance |
| Timeline |
| Youngsin Metal Industrial |
| Digital Multimedia |
Youngsin Metal and Digital Multimedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngsin Metal and Digital Multimedia
The main advantage of trading using opposite Youngsin Metal and Digital Multimedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngsin Metal position performs unexpectedly, Digital Multimedia 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 Digital Multimedia will offset losses from the drop in Digital Multimedia's 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 |
| Digital Multimedia vs. AptaBio Therapeutics | Digital Multimedia vs. Daewoo SBI SPAC | Digital Multimedia vs. Dream Security co | Digital Multimedia vs. Microfriend |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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