Correlation Between Youl Chon and Youngbo Chemical
Can any of the company-specific risk be diversified away by investing in both Youl Chon and Youngbo 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 Youngbo 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 Youngbo Chemical Co, you can compare the effects of market volatilities on Youl Chon and Youngbo 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 Youngbo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youl Chon and Youngbo Chemical.
Diversification Opportunities for Youl Chon and Youngbo Chemical
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Youl and Youngbo is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Youl Chon Chemical and Youngbo Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngbo 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 Youngbo Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youngbo Chemical has no effect on the direction of Youl Chon i.e., Youl Chon and Youngbo Chemical go up and down completely randomly.
Pair Corralation between Youl Chon and Youngbo Chemical
Assuming the 90 days trading horizon Youl Chon Chemical is expected to under-perform the Youngbo Chemical. In addition to that, Youl Chon is 3.16 times more volatile than Youngbo Chemical Co. It trades about 0.0 of its total potential returns per unit of risk. Youngbo Chemical Co is currently generating about 0.16 per unit of volatility. If you would invest 408,500 in Youngbo Chemical Co on November 28, 2024 and sell it today you would earn a total of 27,500 from holding Youngbo Chemical Co or generate 6.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youl Chon Chemical vs. Youngbo Chemical Co
Performance |
| Timeline |
| Youl Chon Chemical |
| Youngbo Chemical |
Youl Chon and Youngbo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youl Chon and Youngbo Chemical
The main advantage of trading using opposite Youl Chon and Youngbo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youl Chon position performs unexpectedly, Youngbo 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 Youngbo Chemical will offset losses from the drop in Youngbo Chemical's long position.| Youl Chon vs. Daesung Hi Tech Co | Youl Chon vs. Busan Industrial Co | Youl Chon vs. Formetal Co | Youl Chon vs. DB Insurance Co |
| Youngbo Chemical vs. Wonbang Tech Co | Youngbo Chemical vs. KMH Hitech Co | Youngbo Chemical vs. Haesung Industrial Co | Youngbo Chemical vs. SS TECH |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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