Correlation Between Youngbo Chemical and TAEYANG
Can any of the company-specific risk be diversified away by investing in both Youngbo Chemical and TAEYANG 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 TAEYANG 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 TAEYANG, you can compare the effects of market volatilities on Youngbo Chemical and TAEYANG 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 TAEYANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngbo Chemical and TAEYANG.
Diversification Opportunities for Youngbo Chemical and TAEYANG
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Youngbo and TAEYANG is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Youngbo Chemical Co and TAEYANG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAEYANG 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 TAEYANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAEYANG has no effect on the direction of Youngbo Chemical i.e., Youngbo Chemical and TAEYANG go up and down completely randomly.
Pair Corralation between Youngbo Chemical and TAEYANG
Assuming the 90 days trading horizon Youngbo Chemical Co is expected to generate 0.81 times more return on investment than TAEYANG. However, Youngbo Chemical Co is 1.24 times less risky than TAEYANG. It trades about 0.19 of its potential returns per unit of risk. TAEYANG is currently generating about 0.01 per unit of risk. If you would invest 338,000 in Youngbo Chemical Co on September 19, 2024 and sell it today you would earn a total of 30,500 from holding Youngbo Chemical Co or generate 9.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youngbo Chemical Co vs. TAEYANG
Performance |
| Timeline |
| Youngbo Chemical |
| TAEYANG |
Youngbo Chemical and TAEYANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngbo Chemical and TAEYANG
The main advantage of trading using opposite Youngbo Chemical and TAEYANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngbo Chemical position performs unexpectedly, TAEYANG 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 TAEYANG will offset losses from the drop in TAEYANG'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 |
| TAEYANG vs. Kukdo Chemical Co | TAEYANG vs. ITM Semiconductor Co | TAEYANG vs. Miwon Chemical | TAEYANG vs. Youngbo Chemical Co |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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