Correlation Between Youngsin Metal and Top Material
Can any of the company-specific risk be diversified away by investing in both Youngsin Metal and Top Material 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 Top Material 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 Top Material Co, you can compare the effects of market volatilities on Youngsin Metal and Top Material 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 Top Material. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngsin Metal and Top Material.
Diversification Opportunities for Youngsin Metal and Top Material
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Youngsin and Top is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Youngsin Metal Industrial and Top Material Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Top Material 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 Top Material. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Top Material has no effect on the direction of Youngsin Metal i.e., Youngsin Metal and Top Material go up and down completely randomly.
Pair Corralation between Youngsin Metal and Top Material
Assuming the 90 days trading horizon Youngsin Metal Industrial is expected to generate 0.62 times more return on investment than Top Material. However, Youngsin Metal Industrial is 1.6 times less risky than Top Material. It trades about -0.26 of its potential returns per unit of risk. Top Material Co is currently generating about -0.31 per unit of risk. If you would invest 235,500 in Youngsin Metal Industrial on November 7, 2024 and sell it today you would lose (16,000) from holding Youngsin Metal Industrial or give up 6.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youngsin Metal Industrial vs. Top Material Co
Performance |
| Timeline |
| Youngsin Metal Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Top Material |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Youngsin Metal and Top Material Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngsin Metal and Top Material
The main advantage of trading using opposite Youngsin Metal and Top Material positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngsin Metal position performs unexpectedly, Top Material 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 Top Material will offset losses from the drop in Top Material's long position.| Youngsin Metal vs. SH Energy Chemical | Youngsin Metal vs. AeroSpace Technology of | Youngsin Metal vs. SK Chemicals Co | Youngsin Metal vs. Vina Technology 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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