Correlation Between Youl Chon and Hanjoo Light
Can any of the company-specific risk be diversified away by investing in both Youl Chon and Hanjoo Light 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 Hanjoo Light 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 Hanjoo Light Metal, you can compare the effects of market volatilities on Youl Chon and Hanjoo Light 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 Hanjoo Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youl Chon and Hanjoo Light.
Diversification Opportunities for Youl Chon and Hanjoo Light
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Youl and Hanjoo is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Youl Chon Chemical and Hanjoo Light Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjoo Light Metal 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 Hanjoo Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjoo Light Metal has no effect on the direction of Youl Chon i.e., Youl Chon and Hanjoo Light go up and down completely randomly.
Pair Corralation between Youl Chon and Hanjoo Light
Assuming the 90 days trading horizon Youl Chon Chemical is expected to generate 1.62 times more return on investment than Hanjoo Light. However, Youl Chon is 1.62 times more volatile than Hanjoo Light Metal. It trades about -0.17 of its potential returns per unit of risk. Hanjoo Light Metal is currently generating about -0.34 per unit of risk. If you would invest 2,825,000 in Youl Chon Chemical on August 30, 2024 and sell it today you would lose (395,000) from holding Youl Chon Chemical or give up 13.98% 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. Hanjoo Light Metal
Performance |
| Timeline |
| Youl Chon Chemical |
| Hanjoo Light Metal |
Youl Chon and Hanjoo Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youl Chon and Hanjoo Light
The main advantage of trading using opposite Youl Chon and Hanjoo Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youl Chon position performs unexpectedly, Hanjoo Light 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 Hanjoo Light will offset losses from the drop in Hanjoo Light's long position.| Youl Chon vs. AptaBio Therapeutics | Youl Chon vs. Daewoo SBI SPAC | Youl Chon vs. Dream Security co | Youl Chon vs. Microfriend |
| Hanjoo Light vs. Samsung Electronics Co | Hanjoo Light vs. Samsung Electronics Co | Hanjoo Light vs. LG Energy Solution | Hanjoo Light vs. SK Hynix |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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