Correlation Between Youngbo Chemical and Korea Information
Can any of the company-specific risk be diversified away by investing in both Youngbo Chemical and Korea Information 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 Korea Information 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 Korea Information Communications, you can compare the effects of market volatilities on Youngbo Chemical and Korea Information 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 Korea Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngbo Chemical and Korea Information.
Diversification Opportunities for Youngbo Chemical and Korea Information
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Youngbo and Korea is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Youngbo Chemical Co and Korea Information Communicatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information 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 Korea Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of Youngbo Chemical i.e., Youngbo Chemical and Korea Information go up and down completely randomly.
Pair Corralation between Youngbo Chemical and Korea Information
Assuming the 90 days trading horizon Youngbo Chemical Co is expected to generate 1.9 times more return on investment than Korea Information. However, Youngbo Chemical is 1.9 times more volatile than Korea Information Communications. It trades about 0.41 of its potential returns per unit of risk. Korea Information Communications is currently generating about 0.05 per unit of risk. If you would invest 362,500 in Youngbo Chemical Co on November 3, 2024 and sell it today you would earn a total of 46,000 from holding Youngbo Chemical Co or generate 12.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youngbo Chemical Co vs. Korea Information Communicatio
Performance |
| Timeline |
| Youngbo Chemical |
| Korea Information |
Youngbo Chemical and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngbo Chemical and Korea Information
The main advantage of trading using opposite Youngbo Chemical and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngbo Chemical position performs unexpectedly, Korea Information 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 Korea Information will offset losses from the drop in Korea Information's long position.| Youngbo Chemical vs. AptaBio Therapeutics | Youngbo Chemical vs. Daewoo SBI SPAC | Youngbo Chemical vs. Dream Security co | Youngbo Chemical vs. Microfriend |
| Korea Information vs. LG Electronics | Korea Information vs. Seoul Electronics Telecom | Korea Information vs. SK Telecom Co | Korea Information vs. Dongbang Transport Logistics |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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