Correlation Between Youngbo Chemical and PJ Metal
Can any of the company-specific risk be diversified away by investing in both Youngbo Chemical and PJ Metal 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 PJ Metal 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 PJ Metal Co, you can compare the effects of market volatilities on Youngbo Chemical and PJ Metal 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 PJ Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngbo Chemical and PJ Metal.
Diversification Opportunities for Youngbo Chemical and PJ Metal
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Youngbo and 128660 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Youngbo Chemical Co and PJ Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PJ Metal 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 PJ Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PJ Metal has no effect on the direction of Youngbo Chemical i.e., Youngbo Chemical and PJ Metal go up and down completely randomly.
Pair Corralation between Youngbo Chemical and PJ Metal
Assuming the 90 days trading horizon Youngbo Chemical Co is expected to generate 3.68 times more return on investment than PJ Metal. However, Youngbo Chemical is 3.68 times more volatile than PJ Metal Co. It trades about 0.36 of its potential returns per unit of risk. PJ Metal Co is currently generating about -0.04 per unit of risk. If you would invest 356,000 in Youngbo Chemical Co on October 30, 2024 and sell it today you would earn a total of 37,000 from holding Youngbo Chemical Co or generate 10.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youngbo Chemical Co vs. PJ Metal Co
Performance |
| Timeline |
| Youngbo Chemical |
| PJ Metal |
Youngbo Chemical and PJ Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngbo Chemical and PJ Metal
The main advantage of trading using opposite Youngbo Chemical and PJ Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngbo Chemical position performs unexpectedly, PJ Metal 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 PJ Metal will offset losses from the drop in PJ Metal's long position.| Youngbo Chemical vs. KB Financial Group | Youngbo Chemical vs. Shinhan Financial Group | Youngbo Chemical vs. Hana Financial | Youngbo Chemical vs. Woori Financial Group |
| PJ Metal vs. Nable Communications | PJ Metal vs. Cloud Air CoLtd | PJ Metal vs. Daishin Information Communications | PJ Metal vs. Korea Air Svc |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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