Correlation Between Youngbo Chemical and Miwon Chemical
Can any of the company-specific risk be diversified away by investing in both Youngbo Chemical and Miwon Chemical 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 Miwon Chemical 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 Miwon Chemical, you can compare the effects of market volatilities on Youngbo Chemical and Miwon Chemical 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 Miwon Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngbo Chemical and Miwon Chemical.
Diversification Opportunities for Youngbo Chemical and Miwon Chemical
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Youngbo and Miwon is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Youngbo Chemical Co and Miwon Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miwon Chemical 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 Miwon Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miwon Chemical has no effect on the direction of Youngbo Chemical i.e., Youngbo Chemical and Miwon Chemical go up and down completely randomly.
Pair Corralation between Youngbo Chemical and Miwon Chemical
Assuming the 90 days trading horizon Youngbo Chemical Co is expected to generate 2.51 times more return on investment than Miwon Chemical. However, Youngbo Chemical is 2.51 times more volatile than Miwon Chemical. It trades about 0.41 of its potential returns per unit of risk. Miwon Chemical is currently generating about -0.07 per unit of risk. If you would invest 362,500 in Youngbo Chemical Co on November 3, 2024 and sell it today you would earn a total of 46,000 from holding Youngbo Chemical Co or generate 12.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youngbo Chemical Co vs. Miwon Chemical
Performance |
| Timeline |
| Youngbo Chemical |
| Miwon Chemical |
Youngbo Chemical and Miwon Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngbo Chemical and Miwon Chemical
The main advantage of trading using opposite Youngbo Chemical and Miwon Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngbo Chemical position performs unexpectedly, Miwon Chemical 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 Miwon Chemical will offset losses from the drop in Miwon Chemical's long position.| Youngbo Chemical vs. AptaBio Therapeutics | Youngbo Chemical vs. Daewoo SBI SPAC | Youngbo Chemical vs. Dream Security co | Youngbo Chemical vs. Microfriend |
| Miwon Chemical vs. Dongil Metal Co | Miwon Chemical vs. E Investment Development | Miwon Chemical vs. ABOV Semiconductor Co | Miwon Chemical vs. Stic Investments |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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