Correlation Between Youl Chon and Hwasung Industrial
Can any of the company-specific risk be diversified away by investing in both Youl Chon and Hwasung Industrial 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 Hwasung Industrial 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 Hwasung Industrial Co, you can compare the effects of market volatilities on Youl Chon and Hwasung Industrial 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 Hwasung Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youl Chon and Hwasung Industrial.
Diversification Opportunities for Youl Chon and Hwasung Industrial
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Youl and Hwasung is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Youl Chon Chemical and Hwasung Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwasung Industrial 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 Hwasung Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwasung Industrial has no effect on the direction of Youl Chon i.e., Youl Chon and Hwasung Industrial go up and down completely randomly.
Pair Corralation between Youl Chon and Hwasung Industrial
Assuming the 90 days trading horizon Youl Chon Chemical is expected to generate 2.78 times more return on investment than Hwasung Industrial. However, Youl Chon is 2.78 times more volatile than Hwasung Industrial Co. It trades about 0.01 of its potential returns per unit of risk. Hwasung Industrial Co is currently generating about 0.0 per unit of risk. If you would invest 3,638,166 in Youl Chon Chemical on October 18, 2024 and sell it today you would lose (608,166) from holding Youl Chon Chemical or give up 16.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youl Chon Chemical vs. Hwasung Industrial Co
Performance |
| Timeline |
| Youl Chon Chemical |
| Hwasung Industrial |
Youl Chon and Hwasung Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youl Chon and Hwasung Industrial
The main advantage of trading using opposite Youl Chon and Hwasung Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youl Chon position performs unexpectedly, Hwasung Industrial 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 Hwasung Industrial will offset losses from the drop in Hwasung Industrial's long position.| Youl Chon vs. AptaBio Therapeutics | Youl Chon vs. Daewoo SBI SPAC | Youl Chon vs. Dream Security co | Youl Chon vs. Microfriend |
| Hwasung Industrial vs. Kukdong Oil Chemicals | Hwasung Industrial vs. Hanil Chemical Ind | Hwasung Industrial vs. Youl Chon Chemical | Hwasung Industrial vs. Wonbang Tech 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 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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