Correlation Between Youl Chon and Daejung Chemicals
Can any of the company-specific risk be diversified away by investing in both Youl Chon and Daejung Chemicals 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 Daejung Chemicals 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 Daejung Chemicals Metals, you can compare the effects of market volatilities on Youl Chon and Daejung Chemicals 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 Daejung Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youl Chon and Daejung Chemicals.
Diversification Opportunities for Youl Chon and Daejung Chemicals
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Youl and Daejung is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Youl Chon Chemical and Daejung Chemicals Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daejung Chemicals Metals 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 Daejung Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daejung Chemicals Metals has no effect on the direction of Youl Chon i.e., Youl Chon and Daejung Chemicals go up and down completely randomly.
Pair Corralation between Youl Chon and Daejung Chemicals
Assuming the 90 days trading horizon Youl Chon Chemical is expected to generate 4.46 times more return on investment than Daejung Chemicals. However, Youl Chon is 4.46 times more volatile than Daejung Chemicals Metals. It trades about 0.46 of its potential returns per unit of risk. Daejung Chemicals Metals is currently generating about -0.05 per unit of risk. If you would invest 2,060,000 in Youl Chon Chemical on November 3, 2024 and sell it today you would earn a total of 1,000,000 from holding Youl Chon Chemical or generate 48.54% 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. Daejung Chemicals Metals
Performance |
| Timeline |
| Youl Chon Chemical |
| Daejung Chemicals Metals |
Youl Chon and Daejung Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youl Chon and Daejung Chemicals
The main advantage of trading using opposite Youl Chon and Daejung Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youl Chon position performs unexpectedly, Daejung Chemicals 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 Daejung Chemicals will offset losses from the drop in Daejung Chemicals' 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 |
| Daejung Chemicals vs. Heungkuk Metaltech CoLtd | Daejung Chemicals vs. Iljin Display | Daejung Chemicals vs. Duksan Hi Metal | Daejung Chemicals vs. Formetal 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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