Correlation Between Youl Chon and Kukdong Oil
Can any of the company-specific risk be diversified away by investing in both Youl Chon and Kukdong Oil 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 Kukdong Oil 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 Kukdong Oil Chemicals, you can compare the effects of market volatilities on Youl Chon and Kukdong Oil 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 Kukdong Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youl Chon and Kukdong Oil.
Diversification Opportunities for Youl Chon and Kukdong Oil
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Youl and Kukdong is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Youl Chon Chemical and Kukdong Oil Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukdong Oil Chemicals 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 Kukdong Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukdong Oil Chemicals has no effect on the direction of Youl Chon i.e., Youl Chon and Kukdong Oil go up and down completely randomly.
Pair Corralation between Youl Chon and Kukdong Oil
Assuming the 90 days trading horizon Youl Chon Chemical is expected to under-perform the Kukdong Oil. In addition to that, Youl Chon is 4.56 times more volatile than Kukdong Oil Chemicals. It trades about -0.23 of its total potential returns per unit of risk. Kukdong Oil Chemicals is currently generating about -0.14 per unit of volatility. If you would invest 371,000 in Kukdong Oil Chemicals on August 29, 2024 and sell it today you would lose (8,500) from holding Kukdong Oil Chemicals or give up 2.29% 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. Kukdong Oil Chemicals
Performance |
| Timeline |
| Youl Chon Chemical |
| Kukdong Oil Chemicals |
Youl Chon and Kukdong Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youl Chon and Kukdong Oil
The main advantage of trading using opposite Youl Chon and Kukdong Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youl Chon position performs unexpectedly, Kukdong Oil 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 Kukdong Oil will offset losses from the drop in Kukdong Oil's long position.| Youl Chon vs. Samhyun Steel Co | Youl Chon vs. Han Kook Steel | Youl Chon vs. Daechang Steel Co | Youl Chon vs. CKH Food Health |
| Kukdong Oil vs. AptaBio Therapeutics | Kukdong Oil vs. Daewoo SBI SPAC | Kukdong Oil vs. Dream Security co | Kukdong Oil vs. Microfriend |
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 Stocks Directory module to find actively traded stocks across global markets.
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