Correlation Between Hannong Chemicals and Youngbo Chemical
Can any of the company-specific risk be diversified away by investing in both Hannong Chemicals 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 Hannong Chemicals and Youngbo Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hannong Chemicals and Youngbo Chemical Co, you can compare the effects of market volatilities on Hannong Chemicals 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 Hannong Chemicals with a short position of Youngbo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannong Chemicals and Youngbo Chemical.
Diversification Opportunities for Hannong Chemicals and Youngbo Chemical
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hannong and Youngbo is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hannong Chemicals and Youngbo Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngbo Chemical and Hannong Chemicals 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 Hannong Chemicals 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 Hannong Chemicals i.e., Hannong Chemicals and Youngbo Chemical go up and down completely randomly.
Pair Corralation between Hannong Chemicals and Youngbo Chemical
Assuming the 90 days trading horizon Hannong Chemicals is expected to under-perform the Youngbo Chemical. In addition to that, Hannong Chemicals is 1.83 times more volatile than Youngbo Chemical Co. It trades about -0.17 of its total potential returns per unit of risk. Youngbo Chemical Co is currently generating about 0.37 per unit of volatility. If you would invest 370,000 in Youngbo Chemical Co on November 6, 2024 and sell it today you would earn a total of 39,000 from holding Youngbo Chemical Co or generate 10.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hannong Chemicals vs. Youngbo Chemical Co
Performance |
| Timeline |
| Hannong Chemicals |
| Youngbo Chemical |
Hannong Chemicals and Youngbo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannong Chemicals and Youngbo Chemical
The main advantage of trading using opposite Hannong Chemicals and Youngbo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannong Chemicals 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.| Hannong Chemicals vs. ABOV Semiconductor Co | Hannong Chemicals vs. Genie Music | Hannong Chemicals vs. Sajo Seafood | Hannong Chemicals vs. Sempio Foods Co |
| Youngbo Chemical vs. NH Investment Securities | Youngbo Chemical vs. KTB Investment Securities | Youngbo Chemical vs. Jeju Beer Co | Youngbo Chemical vs. Daol Investment Securities |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |