Correlation Between Youngbo Chemical and Korean Air
Can any of the company-specific risk be diversified away by investing in both Youngbo Chemical and Korean Air 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 Korean Air 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 Korean Air Lines, you can compare the effects of market volatilities on Youngbo Chemical and Korean Air 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 Korean Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngbo Chemical and Korean Air.
Diversification Opportunities for Youngbo Chemical and Korean Air
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Youngbo and Korean is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Youngbo Chemical Co and Korean Air Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korean Air Lines 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 Korean Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korean Air Lines has no effect on the direction of Youngbo Chemical i.e., Youngbo Chemical and Korean Air go up and down completely randomly.
Pair Corralation between Youngbo Chemical and Korean Air
Assuming the 90 days trading horizon Youngbo Chemical Co is expected to generate 1.03 times more return on investment than Korean Air. However, Youngbo Chemical is 1.03 times more volatile than Korean Air Lines. It trades about 0.02 of its potential returns per unit of risk. Korean Air Lines is currently generating about 0.02 per unit of risk. If you would invest 337,283 in Youngbo Chemical Co on September 19, 2024 and sell it today you would earn a total of 31,217 from holding Youngbo Chemical Co or generate 9.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youngbo Chemical Co vs. Korean Air Lines
Performance |
| Timeline |
| Youngbo Chemical |
| Korean Air Lines |
Youngbo Chemical and Korean Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngbo Chemical and Korean Air
The main advantage of trading using opposite Youngbo Chemical and Korean Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngbo Chemical position performs unexpectedly, Korean Air 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 Korean Air will offset losses from the drop in Korean Air's long position.| Youngbo Chemical vs. Samsung Electronics Co | Youngbo Chemical vs. Samsung Electronics Co | Youngbo Chemical vs. SK Hynix | Youngbo Chemical vs. POSCO Holdings |
| Korean Air vs. E Investment Development | Korean Air vs. Daejung Chemicals Metals | Korean Air vs. KTB Investment Securities | Korean Air vs. SBI Investment KOREA |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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