Correlation Between Kbi Metal and Youngbo Chemical
Can any of the company-specific risk be diversified away by investing in both Kbi Metal and Youngbo 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 Kbi Metal and Youngbo Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kbi Metal Co and Youngbo Chemical Co, you can compare the effects of market volatilities on Kbi Metal and Youngbo 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 Kbi Metal with a short position of Youngbo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kbi Metal and Youngbo Chemical.
Diversification Opportunities for Kbi Metal and Youngbo Chemical
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kbi and Youngbo is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Kbi Metal Co and Youngbo Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngbo Chemical and Kbi Metal 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 Kbi Metal Co are associated (or correlated) with Youngbo Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youngbo Chemical has no effect on the direction of Kbi Metal i.e., Kbi Metal and Youngbo Chemical go up and down completely randomly.
Pair Corralation between Kbi Metal and Youngbo Chemical
Assuming the 90 days trading horizon Kbi Metal Co is expected to generate 2.57 times more return on investment than Youngbo Chemical. However, Kbi Metal is 2.57 times more volatile than Youngbo Chemical Co. It trades about 0.21 of its potential returns per unit of risk. Youngbo Chemical Co is currently generating about 0.14 per unit of risk. If you would invest 193,700 in Kbi Metal Co on October 13, 2024 and sell it today you would earn a total of 25,800 from holding Kbi Metal Co or generate 13.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kbi Metal Co vs. Youngbo Chemical Co
Performance |
| Timeline |
| Kbi Metal |
| Youngbo Chemical |
Kbi Metal and Youngbo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kbi Metal and Youngbo Chemical
The main advantage of trading using opposite Kbi Metal and Youngbo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kbi Metal position performs unexpectedly, Youngbo 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 Youngbo Chemical will offset losses from the drop in Youngbo Chemical's long position.| Kbi Metal vs. SKONEC Entertainment Co | Kbi Metal vs. Nasmedia Co | Kbi Metal vs. Tway Air Co | Kbi Metal vs. Homecast CoLtd |
| Youngbo Chemical vs. Youngsin Metal Industrial | Youngbo Chemical vs. Dongbang Transport Logistics | Youngbo Chemical vs. Formetal Co | Youngbo Chemical vs. Kbi Metal 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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