Correlation Between Youngbo Chemical and Tway Air
Can any of the company-specific risk be diversified away by investing in both Youngbo Chemical and Tway Air 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 Tway Air 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 Tway Air Co, you can compare the effects of market volatilities on Youngbo Chemical and Tway Air 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 Tway Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngbo Chemical and Tway Air.
Diversification Opportunities for Youngbo Chemical and Tway Air
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Youngbo and Tway is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Youngbo Chemical Co and Tway Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tway Air 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 Tway Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tway Air has no effect on the direction of Youngbo Chemical i.e., Youngbo Chemical and Tway Air go up and down completely randomly.
Pair Corralation between Youngbo Chemical and Tway Air
Assuming the 90 days trading horizon Youngbo Chemical Co is expected to generate 0.49 times more return on investment than Tway Air. However, Youngbo Chemical Co is 2.05 times less risky than Tway Air. It trades about 0.01 of its potential returns per unit of risk. Tway Air Co is currently generating about 0.0 per unit of risk. If you would invest 353,062 in Youngbo Chemical Co on September 19, 2024 and sell it today you would earn a total of 15,438 from holding Youngbo Chemical Co or generate 4.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youngbo Chemical Co vs. Tway Air Co
Performance |
| Timeline |
| Youngbo Chemical |
| Tway Air |
Youngbo Chemical and Tway Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngbo Chemical and Tway Air
The main advantage of trading using opposite Youngbo Chemical and Tway Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngbo Chemical position performs unexpectedly, Tway Air 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 Tway Air will offset losses from the drop in Tway Air'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 |
| Tway Air vs. Jin Air Co | Tway Air vs. Air Busan Co | Tway Air vs. Solution Advanced Technology | Tway Air vs. Busan Industrial 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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