Correlation Between Kyeryong Construction and Youngsin Metal
Can any of the company-specific risk be diversified away by investing in both Kyeryong Construction and Youngsin Metal 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 Kyeryong Construction and Youngsin Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kyeryong Construction Industrial and Youngsin Metal Industrial, you can compare the effects of market volatilities on Kyeryong Construction and Youngsin Metal 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 Kyeryong Construction with a short position of Youngsin Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyeryong Construction and Youngsin Metal.
Diversification Opportunities for Kyeryong Construction and Youngsin Metal
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kyeryong and Youngsin is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Kyeryong Construction Industri and Youngsin Metal Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngsin Metal Industrial and Kyeryong Construction 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 Kyeryong Construction Industrial are associated (or correlated) with Youngsin Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youngsin Metal Industrial has no effect on the direction of Kyeryong Construction i.e., Kyeryong Construction and Youngsin Metal go up and down completely randomly.
Pair Corralation between Kyeryong Construction and Youngsin Metal
Assuming the 90 days trading horizon Kyeryong Construction Industrial is expected to generate 0.47 times more return on investment than Youngsin Metal. However, Kyeryong Construction Industrial is 2.14 times less risky than Youngsin Metal. It trades about 0.05 of its potential returns per unit of risk. Youngsin Metal Industrial is currently generating about 0.01 per unit of risk. If you would invest 1,288,000 in Kyeryong Construction Industrial on September 19, 2024 and sell it today you would earn a total of 21,000 from holding Kyeryong Construction Industrial or generate 1.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kyeryong Construction Industri vs. Youngsin Metal Industrial
Performance |
| Timeline |
| Kyeryong Construction |
| Youngsin Metal Industrial |
Kyeryong Construction and Youngsin Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kyeryong Construction and Youngsin Metal
The main advantage of trading using opposite Kyeryong Construction and Youngsin Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyeryong Construction position performs unexpectedly, Youngsin Metal 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 Youngsin Metal will offset losses from the drop in Youngsin Metal's long position.| Kyeryong Construction vs. Samsung Electronics Co | Kyeryong Construction vs. Samsung Electronics Co | Kyeryong Construction vs. SK Hynix | Kyeryong Construction vs. POSCO Holdings |
| Youngsin Metal vs. Korea New Network | Youngsin Metal vs. Solution Advanced Technology | Youngsin Metal vs. Busan Industrial Co | Youngsin Metal vs. Busan Ind |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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