Correlation Between Youl Chon and Korea Petro
Can any of the company-specific risk be diversified away by investing in both Youl Chon and Korea Petro 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 Korea Petro 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 Korea Petro Chemical, you can compare the effects of market volatilities on Youl Chon and Korea Petro 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 Korea Petro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youl Chon and Korea Petro.
Diversification Opportunities for Youl Chon and Korea Petro
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Youl and Korea is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Youl Chon Chemical and Korea Petro Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Petro Chemical 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 Korea Petro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Petro Chemical has no effect on the direction of Youl Chon i.e., Youl Chon and Korea Petro go up and down completely randomly.
Pair Corralation between Youl Chon and Korea Petro
Assuming the 90 days trading horizon Youl Chon Chemical is expected to generate 1.33 times more return on investment than Korea Petro. However, Youl Chon is 1.33 times more volatile than Korea Petro Chemical. It trades about -0.2 of its potential returns per unit of risk. Korea Petro Chemical is currently generating about -0.31 per unit of risk. If you would invest 2,840,000 in Youl Chon Chemical on August 28, 2024 and sell it today you would lose (400,000) from holding Youl Chon Chemical or give up 14.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youl Chon Chemical vs. Korea Petro Chemical
Performance |
| Timeline |
| Youl Chon Chemical |
| Korea Petro Chemical |
Youl Chon and Korea Petro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youl Chon and Korea Petro
The main advantage of trading using opposite Youl Chon and Korea Petro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youl Chon position performs unexpectedly, Korea Petro 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 Korea Petro will offset losses from the drop in Korea Petro's long position.| Youl Chon vs. AptaBio Therapeutics | Youl Chon vs. Daewoo SBI SPAC | Youl Chon vs. Dream Security co | Youl Chon vs. Microfriend |
| Korea Petro vs. LG Chemicals | Korea Petro vs. Lotte Chemical Corp | Korea Petro vs. Hyundai Steel | Korea Petro vs. Seah Steel Corp |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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