Correlation Between Youngbo Chemical and Korea Industrial
Can any of the company-specific risk be diversified away by investing in both Youngbo Chemical and Korea Industrial 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 Youngbo Chemical and Korea Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Youngbo Chemical Co and Korea Industrial Co, you can compare the effects of market volatilities on Youngbo Chemical and Korea Industrial 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 Youngbo Chemical with a short position of Korea Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngbo Chemical and Korea Industrial.
Diversification Opportunities for Youngbo Chemical and Korea Industrial
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Youngbo and Korea is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Youngbo Chemical Co and Korea Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Industrial and Youngbo Chemical 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 Youngbo Chemical Co are associated (or correlated) with Korea Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Industrial has no effect on the direction of Youngbo Chemical i.e., Youngbo Chemical and Korea Industrial go up and down completely randomly.
Pair Corralation between Youngbo Chemical and Korea Industrial
Assuming the 90 days trading horizon Youngbo Chemical Co is expected to generate 0.43 times more return on investment than Korea Industrial. However, Youngbo Chemical Co is 2.31 times less risky than Korea Industrial. It trades about 0.02 of its potential returns per unit of risk. Korea Industrial Co is currently generating about 0.0 per unit of risk. If you would invest 365,635 in Youngbo Chemical Co on October 30, 2024 and sell it today you would earn a total of 27,365 from holding Youngbo Chemical Co or generate 7.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youngbo Chemical Co vs. Korea Industrial Co
Performance |
| Timeline |
| Youngbo Chemical |
| Korea Industrial |
Youngbo Chemical and Korea Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngbo Chemical and Korea Industrial
The main advantage of trading using opposite Youngbo Chemical and Korea Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngbo Chemical position performs unexpectedly, Korea Industrial 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 Korea Industrial will offset losses from the drop in Korea Industrial's long position.| Youngbo Chemical vs. KB Financial Group | Youngbo Chemical vs. Shinhan Financial Group | Youngbo Chemical vs. Hana Financial | Youngbo Chemical vs. Woori Financial Group |
| Korea Industrial vs. INFINITT Healthcare Co | Korea Industrial vs. LG Household Healthcare | Korea Industrial vs. Fine Besteel Co | Korea Industrial vs. Hwangkum Steel Technology |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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