Correlation Between Youl Chon and Wonil Special
Can any of the company-specific risk be diversified away by investing in both Youl Chon and Wonil Special 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 Wonil Special 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 Wonil Special Steel, you can compare the effects of market volatilities on Youl Chon and Wonil Special 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 Wonil Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youl Chon and Wonil Special.
Diversification Opportunities for Youl Chon and Wonil Special
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Youl and Wonil is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Youl Chon Chemical and Wonil Special Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonil Special Steel 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 Wonil Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonil Special Steel has no effect on the direction of Youl Chon i.e., Youl Chon and Wonil Special go up and down completely randomly.
Pair Corralation between Youl Chon and Wonil Special
Assuming the 90 days trading horizon Youl Chon Chemical is expected to generate 7.97 times more return on investment than Wonil Special. However, Youl Chon is 7.97 times more volatile than Wonil Special Steel. It trades about 0.42 of its potential returns per unit of risk. Wonil Special Steel is currently generating about -0.01 per unit of risk. If you would invest 2,150,000 in Youl Chon Chemical on November 4, 2024 and sell it today you would earn a total of 910,000 from holding Youl Chon Chemical or generate 42.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youl Chon Chemical vs. Wonil Special Steel
Performance |
| Timeline |
| Youl Chon Chemical |
| Wonil Special Steel |
Youl Chon and Wonil Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youl Chon and Wonil Special
The main advantage of trading using opposite Youl Chon and Wonil Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youl Chon position performs unexpectedly, Wonil Special 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 Wonil Special will offset losses from the drop in Wonil Special'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 |
| Wonil Special vs. Korea Investment Holdings | Wonil Special vs. Atinum Investment Co | Wonil Special vs. DB Financial Investment | Wonil Special vs. Stic Investments |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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