Correlation Between Youngbo Chemical and Kukdo Chemical
Can any of the company-specific risk be diversified away by investing in both Youngbo Chemical and Kukdo Chemical 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 Kukdo Chemical 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 Kukdo Chemical Co, you can compare the effects of market volatilities on Youngbo Chemical and Kukdo Chemical 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 Kukdo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngbo Chemical and Kukdo Chemical.
Diversification Opportunities for Youngbo Chemical and Kukdo Chemical
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Youngbo and Kukdo is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Youngbo Chemical Co and Kukdo Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukdo Chemical 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 Kukdo Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukdo Chemical has no effect on the direction of Youngbo Chemical i.e., Youngbo Chemical and Kukdo Chemical go up and down completely randomly.
Pair Corralation between Youngbo Chemical and Kukdo Chemical
Assuming the 90 days trading horizon Youngbo Chemical Co is expected to generate 0.74 times more return on investment than Kukdo Chemical. However, Youngbo Chemical Co is 1.36 times less risky than Kukdo Chemical. It trades about 0.26 of its potential returns per unit of risk. Kukdo Chemical Co is currently generating about -0.05 per unit of risk. If you would invest 349,000 in Youngbo Chemical Co on September 19, 2024 and sell it today you would earn a total of 27,500 from holding Youngbo Chemical Co or generate 7.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Youngbo Chemical Co vs. Kukdo Chemical Co
Performance |
Timeline |
Youngbo Chemical |
Kukdo Chemical |
Youngbo Chemical and Kukdo Chemical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Youngbo Chemical and Kukdo Chemical
The main advantage of trading using opposite Youngbo Chemical and Kukdo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngbo Chemical position performs unexpectedly, Kukdo Chemical 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 Kukdo Chemical will offset losses from the drop in Kukdo Chemical'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 |
Kukdo Chemical vs. Samsung Electronics Co | Kukdo Chemical vs. Samsung Electronics Co | Kukdo Chemical vs. SK Hynix | Kukdo Chemical vs. POSCO Holdings |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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