Correlation Between Kukdo Chemical and Youl Chon
Can any of the company-specific risk be diversified away by investing in both Kukdo Chemical and Youl Chon 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 Kukdo Chemical and Youl Chon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kukdo Chemical Co and Youl Chon Chemical, you can compare the effects of market volatilities on Kukdo Chemical and Youl Chon 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 Kukdo Chemical with a short position of Youl Chon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukdo Chemical and Youl Chon.
Diversification Opportunities for Kukdo Chemical and Youl Chon
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kukdo and Youl is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Kukdo Chemical Co and Youl Chon Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youl Chon Chemical and Kukdo Chemical 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 Kukdo Chemical Co are associated (or correlated) with Youl Chon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youl Chon Chemical has no effect on the direction of Kukdo Chemical i.e., Kukdo Chemical and Youl Chon go up and down completely randomly.
Pair Corralation between Kukdo Chemical and Youl Chon
Assuming the 90 days trading horizon Kukdo Chemical Co is expected to generate 0.52 times more return on investment than Youl Chon. However, Kukdo Chemical Co is 1.93 times less risky than Youl Chon. It trades about -0.27 of its potential returns per unit of risk. Youl Chon Chemical is currently generating about -0.24 per unit of risk. If you would invest 3,350,000 in Kukdo Chemical Co on August 30, 2024 and sell it today you would lose (345,000) from holding Kukdo Chemical Co or give up 10.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kukdo Chemical Co vs. Youl Chon Chemical
Performance |
| Timeline |
| Kukdo Chemical |
| Youl Chon Chemical |
Kukdo Chemical and Youl Chon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukdo Chemical and Youl Chon
The main advantage of trading using opposite Kukdo Chemical and Youl Chon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukdo Chemical position performs unexpectedly, Youl Chon 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 Youl Chon will offset losses from the drop in Youl Chon's long position.| Kukdo Chemical vs. AptaBio Therapeutics | Kukdo Chemical vs. Daewoo SBI SPAC | Kukdo Chemical vs. Dream Security co | Kukdo Chemical vs. Microfriend |
| Youl Chon vs. AptaBio Therapeutics | Youl Chon vs. Daewoo SBI SPAC | Youl Chon vs. Dream Security co | Youl Chon 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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