Correlation Between Youl Chon and Kukdo Chemical
Can any of the company-specific risk be diversified away by investing in both Youl Chon and Kukdo Chemical 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 Kukdo Chemical 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 Kukdo Chemical Co, you can compare the effects of market volatilities on Youl Chon and Kukdo Chemical 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 Kukdo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youl Chon and Kukdo Chemical.
Diversification Opportunities for Youl Chon and Kukdo Chemical
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Youl and Kukdo is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Youl Chon Chemical and Kukdo Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukdo 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 Kukdo Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukdo Chemical has no effect on the direction of Youl Chon i.e., Youl Chon and Kukdo Chemical go up and down completely randomly.
Pair Corralation between Youl Chon and Kukdo Chemical
Assuming the 90 days trading horizon Youl Chon Chemical is expected to generate 1.97 times more return on investment than Kukdo Chemical. However, Youl Chon is 1.97 times more volatile than Kukdo Chemical Co. It trades about 0.01 of its potential returns per unit of risk. Kukdo Chemical Co is currently generating about -0.05 per unit of risk. If you would invest 3,320,095 in Youl Chon Chemical on November 4, 2024 and sell it today you would lose (260,095) from holding Youl Chon Chemical or give up 7.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youl Chon Chemical vs. Kukdo Chemical Co
Performance |
| Timeline |
| Youl Chon Chemical |
| Kukdo Chemical |
Youl Chon and Kukdo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youl Chon and Kukdo Chemical
The main advantage of trading using opposite Youl Chon and Kukdo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youl Chon position performs unexpectedly, Kukdo Chemical 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 Kukdo Chemical will offset losses from the drop in Kukdo Chemical's long position.| Youl Chon vs. BIT Computer Co | Youl Chon vs. Nable Communications | Youl Chon vs. Inzi Display CoLtd | Youl Chon vs. Daejoo Electronic Materials |
| Kukdo Chemical vs. Samyung Trading Co | Kukdo Chemical vs. Narae Nanotech Corp | Kukdo Chemical vs. Daelim Trading Co | Kukdo Chemical vs. FNSTech 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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