Correlation Between Youngbo Chemical and Daehan Synthetic
Can any of the company-specific risk be diversified away by investing in both Youngbo Chemical and Daehan Synthetic 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 Daehan Synthetic 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 Daehan Synthetic Fiber, you can compare the effects of market volatilities on Youngbo Chemical and Daehan Synthetic 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 Daehan Synthetic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngbo Chemical and Daehan Synthetic.
Diversification Opportunities for Youngbo Chemical and Daehan Synthetic
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Youngbo and Daehan is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Youngbo Chemical Co and Daehan Synthetic Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daehan Synthetic Fiber 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 Daehan Synthetic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daehan Synthetic Fiber has no effect on the direction of Youngbo Chemical i.e., Youngbo Chemical and Daehan Synthetic go up and down completely randomly.
Pair Corralation between Youngbo Chemical and Daehan Synthetic
Assuming the 90 days trading horizon Youngbo Chemical Co is expected to generate 1.26 times more return on investment than Daehan Synthetic. However, Youngbo Chemical is 1.26 times more volatile than Daehan Synthetic Fiber. It trades about 0.16 of its potential returns per unit of risk. Daehan Synthetic Fiber is currently generating about -0.05 per unit of risk. If you would invest 339,000 in Youngbo Chemical Co on August 31, 2024 and sell it today you would earn a total of 10,000 from holding Youngbo Chemical Co or generate 2.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youngbo Chemical Co vs. Daehan Synthetic Fiber
Performance |
| Timeline |
| Youngbo Chemical |
| Daehan Synthetic Fiber |
Youngbo Chemical and Daehan Synthetic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngbo Chemical and Daehan Synthetic
The main advantage of trading using opposite Youngbo Chemical and Daehan Synthetic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngbo Chemical position performs unexpectedly, Daehan Synthetic 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 Daehan Synthetic will offset losses from the drop in Daehan Synthetic's long position.| Youngbo Chemical vs. AptaBio Therapeutics | Youngbo Chemical vs. Daewoo SBI SPAC | Youngbo Chemical vs. Dream Security co | Youngbo Chemical vs. Microfriend |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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