Correlation Between Youngsin Metal and Jeju Beer
Can any of the company-specific risk be diversified away by investing in both Youngsin Metal and Jeju Beer 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 Jeju Beer 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 Jeju Beer Co, you can compare the effects of market volatilities on Youngsin Metal and Jeju Beer 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 Jeju Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngsin Metal and Jeju Beer.
Diversification Opportunities for Youngsin Metal and Jeju Beer
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Youngsin and Jeju is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Youngsin Metal Industrial and Jeju Beer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Beer 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 Jeju Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Beer has no effect on the direction of Youngsin Metal i.e., Youngsin Metal and Jeju Beer go up and down completely randomly.
Pair Corralation between Youngsin Metal and Jeju Beer
Assuming the 90 days trading horizon Youngsin Metal Industrial is expected to generate 1.03 times more return on investment than Jeju Beer. However, Youngsin Metal is 1.03 times more volatile than Jeju Beer Co. It trades about 0.25 of its potential returns per unit of risk. Jeju Beer Co is currently generating about 0.05 per unit of risk. If you would invest 197,700 in Youngsin Metal Industrial on October 9, 2024 and sell it today you would earn a total of 37,800 from holding Youngsin Metal Industrial or generate 19.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youngsin Metal Industrial vs. Jeju Beer Co
Performance |
| Timeline |
| Youngsin Metal Industrial |
| Jeju Beer |
Youngsin Metal and Jeju Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngsin Metal and Jeju Beer
The main advantage of trading using opposite Youngsin Metal and Jeju Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngsin Metal position performs unexpectedly, Jeju Beer 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 Jeju Beer will offset losses from the drop in Jeju Beer's long position.| Youngsin Metal vs. Digital Multimedia Technology | Youngsin Metal vs. SAMG Entertainment Co | Youngsin Metal vs. J Steel Co | Youngsin Metal vs. Daewon Media Co |
| Jeju Beer vs. ENERGYMACHINERY KOREA CoLtd | Jeju Beer vs. Nam Hwa Construction | Jeju Beer vs. Dongbang Ship Machinery | Jeju Beer vs. Lotte Chilsung Beverage |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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