Correlation Between Youngbo Chemical and Pharmicell
Can any of the company-specific risk be diversified away by investing in both Youngbo Chemical and Pharmicell 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 Pharmicell 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 Pharmicell, you can compare the effects of market volatilities on Youngbo Chemical and Pharmicell 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 Pharmicell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngbo Chemical and Pharmicell.
Diversification Opportunities for Youngbo Chemical and Pharmicell
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Youngbo and Pharmicell is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Youngbo Chemical Co and Pharmicell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pharmicell 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 Pharmicell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pharmicell has no effect on the direction of Youngbo Chemical i.e., Youngbo Chemical and Pharmicell go up and down completely randomly.
Pair Corralation between Youngbo Chemical and Pharmicell
Assuming the 90 days trading horizon Youngbo Chemical Co is expected to generate 0.39 times more return on investment than Pharmicell. However, Youngbo Chemical Co is 2.54 times less risky than Pharmicell. It trades about 0.37 of its potential returns per unit of risk. Pharmicell is currently generating about -0.03 per unit of risk. If you would invest 369,500 in Youngbo Chemical Co on November 8, 2024 and sell it today you would earn a total of 58,000 from holding Youngbo Chemical Co or generate 15.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youngbo Chemical Co vs. Pharmicell
Performance |
| Timeline |
| Youngbo Chemical |
| Pharmicell |
Youngbo Chemical and Pharmicell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngbo Chemical and Pharmicell
The main advantage of trading using opposite Youngbo Chemical and Pharmicell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngbo Chemical position performs unexpectedly, Pharmicell 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 Pharmicell will offset losses from the drop in Pharmicell's long position.| Youngbo Chemical vs. CKH Food Health | Youngbo Chemical vs. Aprogen Healthcare Games | Youngbo Chemical vs. ABOV Semiconductor Co | Youngbo Chemical vs. FOODWELL Co |
| Pharmicell vs. LAKE MATERIALS LTD | Pharmicell vs. Hanil Chemical Ind | Pharmicell vs. SAMG Entertainment Co | Pharmicell vs. UJU Electronics Co |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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