Correlation Between Youngbo Chemical and Hankuk Steel
Can any of the company-specific risk be diversified away by investing in both Youngbo Chemical and Hankuk Steel 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 Hankuk Steel 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 Hankuk Steel Wire, you can compare the effects of market volatilities on Youngbo Chemical and Hankuk Steel 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 Hankuk Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngbo Chemical and Hankuk Steel.
Diversification Opportunities for Youngbo Chemical and Hankuk Steel
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Youngbo and Hankuk is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Youngbo Chemical Co and Hankuk Steel Wire in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hankuk Steel Wire 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 Hankuk Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hankuk Steel Wire has no effect on the direction of Youngbo Chemical i.e., Youngbo Chemical and Hankuk Steel go up and down completely randomly.
Pair Corralation between Youngbo Chemical and Hankuk Steel
Assuming the 90 days trading horizon Youngbo Chemical is expected to generate 2.86 times less return on investment than Hankuk Steel. But when comparing it to its historical volatility, Youngbo Chemical Co is 1.94 times less risky than Hankuk Steel. It trades about 0.01 of its potential returns per unit of risk. Hankuk Steel Wire is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 289,000 in Hankuk Steel Wire on September 3, 2024 and sell it today you would earn a total of 1,000.00 from holding Hankuk Steel Wire or generate 0.35% 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. Hankuk Steel Wire
Performance |
| Timeline |
| Youngbo Chemical |
| Hankuk Steel Wire |
Youngbo Chemical and Hankuk Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngbo Chemical and Hankuk Steel
The main advantage of trading using opposite Youngbo Chemical and Hankuk Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngbo Chemical position performs unexpectedly, Hankuk Steel 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 Hankuk Steel will offset losses from the drop in Hankuk Steel's long position.| Youngbo Chemical vs. AptaBio Therapeutics | Youngbo Chemical vs. Daewoo SBI SPAC | Youngbo Chemical vs. Dream Security co | Youngbo Chemical vs. Microfriend |
| Hankuk Steel vs. Youngbo Chemical Co | Hankuk Steel vs. Daelim Industrial Co | Hankuk Steel vs. Kumho Industrial Co | Hankuk Steel vs. Pungguk Ethanol Industrial |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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