Correlation Between Youl Chon and Kia Corp
Can any of the company-specific risk be diversified away by investing in both Youl Chon and Kia Corp 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 Youl Chon and Kia Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Youl Chon Chemical and Kia Corp, you can compare the effects of market volatilities on Youl Chon and Kia Corp 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 Youl Chon with a short position of Kia Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youl Chon and Kia Corp.
Diversification Opportunities for Youl Chon and Kia Corp
Excellent diversification
The 3 months correlation between Youl and Kia is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Youl Chon Chemical and Kia Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kia Corp and Youl Chon 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 Youl Chon Chemical are associated (or correlated) with Kia Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kia Corp has no effect on the direction of Youl Chon i.e., Youl Chon and Kia Corp go up and down completely randomly.
Pair Corralation between Youl Chon and Kia Corp
Assuming the 90 days trading horizon Youl Chon Chemical is expected to under-perform the Kia Corp. In addition to that, Youl Chon is 1.74 times more volatile than Kia Corp. It trades about -0.09 of its total potential returns per unit of risk. Kia Corp is currently generating about -0.08 per unit of volatility. If you would invest 11,950,000 in Kia Corp on September 3, 2024 and sell it today you would lose (2,660,000) from holding Kia Corp or give up 22.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youl Chon Chemical vs. Kia Corp
Performance |
| Timeline |
| Youl Chon Chemical |
| Kia Corp |
Youl Chon and Kia Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youl Chon and Kia Corp
The main advantage of trading using opposite Youl Chon and Kia Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youl Chon position performs unexpectedly, Kia Corp 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 Kia Corp will offset losses from the drop in Kia Corp's long position.| Youl Chon vs. Daiyang Metal Co | Youl Chon vs. Namhwa Industrial Co | Youl Chon vs. KMH Hitech Co | Youl Chon vs. Asiana Airlines |
| Kia Corp vs. CJ Seafood Corp | Kia Corp vs. Youl Chon Chemical | Kia Corp vs. Miwon Chemical | Kia Corp vs. FOODWELL 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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