Correlation Between Youngbo Chemical and Korea Ratings
Can any of the company-specific risk be diversified away by investing in both Youngbo Chemical and Korea Ratings 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 Ratings 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 Ratings Co, you can compare the effects of market volatilities on Youngbo Chemical and Korea Ratings 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 Ratings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngbo Chemical and Korea Ratings.
Diversification Opportunities for Youngbo Chemical and Korea Ratings
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Youngbo and Korea is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Youngbo Chemical Co and Korea Ratings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Ratings 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 Ratings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Ratings has no effect on the direction of Youngbo Chemical i.e., Youngbo Chemical and Korea Ratings go up and down completely randomly.
Pair Corralation between Youngbo Chemical and Korea Ratings
Assuming the 90 days trading horizon Youngbo Chemical is expected to generate 2.83 times less return on investment than Korea Ratings. In addition to that, Youngbo Chemical is 1.35 times more volatile than Korea Ratings Co. It trades about 0.05 of its total potential returns per unit of risk. Korea Ratings Co is currently generating about 0.21 per unit of volatility. If you would invest 8,530,000 in Korea Ratings Co on September 1, 2024 and sell it today you would earn a total of 270,000 from holding Korea Ratings Co or generate 3.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youngbo Chemical Co vs. Korea Ratings Co
Performance |
| Timeline |
| Youngbo Chemical |
| Korea Ratings |
Youngbo Chemical and Korea Ratings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngbo Chemical and Korea Ratings
The main advantage of trading using opposite Youngbo Chemical and Korea Ratings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngbo Chemical position performs unexpectedly, Korea Ratings 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 Ratings will offset losses from the drop in Korea Ratings' long position.| Youngbo Chemical vs. Echomarketing CoLtd | Youngbo Chemical vs. LG Electronics Pfd | Youngbo Chemical vs. Cuckoo Homesys Co | Youngbo Chemical vs. PJ Electronics Co |
| Korea Ratings vs. Histeel | Korea Ratings vs. Nice Information Telecommunication | Korea Ratings vs. Ssangyong Information Communication | Korea Ratings vs. Lotte Data Communication |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |