Correlation Between Youngbo Chemical and GemVaxKAEL CoLtd
Can any of the company-specific risk be diversified away by investing in both Youngbo Chemical and GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd, you can compare the effects of market volatilities on Youngbo Chemical and GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngbo Chemical and GemVaxKAEL CoLtd.
Diversification Opportunities for Youngbo Chemical and GemVaxKAEL CoLtd
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Youngbo and GemVaxKAEL is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Youngbo Chemical Co and GemVaxKAEL CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GemVaxKAEL CoLtd has no effect on the direction of Youngbo Chemical i.e., Youngbo Chemical and GemVaxKAEL CoLtd go up and down completely randomly.
Pair Corralation between Youngbo Chemical and GemVaxKAEL CoLtd
Assuming the 90 days trading horizon Youngbo Chemical is expected to generate 2.4 times less return on investment than GemVaxKAEL CoLtd. But when comparing it to its historical volatility, Youngbo Chemical Co is 1.91 times less risky than GemVaxKAEL CoLtd. It trades about 0.33 of its potential returns per unit of risk. GemVaxKAEL CoLtd is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 1,517,000 in GemVaxKAEL CoLtd on November 4, 2024 and sell it today you would earn a total of 370,000 from holding GemVaxKAEL CoLtd or generate 24.39% 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. GemVaxKAEL CoLtd
Performance |
| Timeline |
| Youngbo Chemical |
| GemVaxKAEL CoLtd |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Youngbo Chemical and GemVaxKAEL CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngbo Chemical and GemVaxKAEL CoLtd
The main advantage of trading using opposite Youngbo Chemical and GemVaxKAEL CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngbo Chemical position performs unexpectedly, GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd will offset losses from the drop in GemVaxKAEL CoLtd's long position.| Youngbo Chemical vs. Seoul Food Industrial | Youngbo Chemical vs. SH Energy Chemical | Youngbo Chemical vs. Hyundai Green Food | Youngbo Chemical vs. Dongnam Chemical Co |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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