Correlation Between Youngsin Metal and JETEMA
Can any of the company-specific risk be diversified away by investing in both Youngsin Metal and JETEMA 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 JETEMA 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 JETEMA Co, you can compare the effects of market volatilities on Youngsin Metal and JETEMA 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 JETEMA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngsin Metal and JETEMA.
Diversification Opportunities for Youngsin Metal and JETEMA
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Youngsin and JETEMA is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Youngsin Metal Industrial and JETEMA Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JETEMA 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 JETEMA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JETEMA has no effect on the direction of Youngsin Metal i.e., Youngsin Metal and JETEMA go up and down completely randomly.
Pair Corralation between Youngsin Metal and JETEMA
Assuming the 90 days trading horizon Youngsin Metal Industrial is expected to generate 1.46 times more return on investment than JETEMA. However, Youngsin Metal is 1.46 times more volatile than JETEMA Co. It trades about 0.18 of its potential returns per unit of risk. JETEMA Co is currently generating about -0.24 per unit of risk. If you would invest 208,000 in Youngsin Metal Industrial on October 7, 2024 and sell it today you would earn a total of 28,500 from holding Youngsin Metal Industrial or generate 13.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youngsin Metal Industrial vs. JETEMA Co
Performance |
| Timeline |
| Youngsin Metal Industrial |
| JETEMA |
Youngsin Metal and JETEMA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngsin Metal and JETEMA
The main advantage of trading using opposite Youngsin Metal and JETEMA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngsin Metal position performs unexpectedly, JETEMA 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 JETEMA will offset losses from the drop in JETEMA's long position.| Youngsin Metal vs. SKONEC Entertainment Co | Youngsin Metal vs. Sungdo Engineering Construction | Youngsin Metal vs. SEOJEON ELECTRIC MACHINERY | Youngsin Metal vs. Innowireless Co |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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