Correlation Between Youngbo Chemical and Namhae Chemical
Can any of the company-specific risk be diversified away by investing in both Youngbo Chemical and Namhae 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 Namhae 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 Namhae Chemical, you can compare the effects of market volatilities on Youngbo Chemical and Namhae 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 Namhae Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngbo Chemical and Namhae Chemical.
Diversification Opportunities for Youngbo Chemical and Namhae Chemical
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Youngbo and Namhae is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Youngbo Chemical Co and Namhae Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namhae 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 Namhae Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Namhae Chemical has no effect on the direction of Youngbo Chemical i.e., Youngbo Chemical and Namhae Chemical go up and down completely randomly.
Pair Corralation between Youngbo Chemical and Namhae Chemical
Assuming the 90 days trading horizon Youngbo Chemical Co is expected to generate 0.79 times more return on investment than Namhae Chemical. However, Youngbo Chemical Co is 1.27 times less risky than Namhae Chemical. It trades about -0.04 of its potential returns per unit of risk. Namhae Chemical is currently generating about -0.06 per unit of risk. If you would invest 361,000 in Youngbo Chemical Co on September 2, 2024 and sell it today you would lose (18,000) from holding Youngbo Chemical Co or give up 4.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youngbo Chemical Co vs. Namhae Chemical
Performance |
| Timeline |
| Youngbo Chemical |
| Namhae Chemical |
Youngbo Chemical and Namhae Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngbo Chemical and Namhae Chemical
The main advantage of trading using opposite Youngbo Chemical and Namhae Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngbo Chemical position performs unexpectedly, Namhae 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 Namhae Chemical will offset losses from the drop in Namhae Chemical's long position.| Youngbo Chemical vs. AptaBio Therapeutics | Youngbo Chemical vs. Daewoo SBI SPAC | Youngbo Chemical vs. Dream Security co | Youngbo Chemical vs. Microfriend |
| Namhae Chemical vs. LG Chemicals | Namhae Chemical vs. POSCO Holdings | Namhae Chemical vs. Hanwha Solutions | Namhae Chemical vs. Hyundai Steel |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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