Correlation Between Hwangkum Steel and Youngbo Chemical
Can any of the company-specific risk be diversified away by investing in both Hwangkum Steel 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 Hwangkum Steel and Youngbo Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hwangkum Steel Technology and Youngbo Chemical Co, you can compare the effects of market volatilities on Hwangkum Steel 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 Hwangkum Steel with a short position of Youngbo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwangkum Steel and Youngbo Chemical.
Diversification Opportunities for Hwangkum Steel and Youngbo Chemical
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hwangkum and Youngbo is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Hwangkum Steel Technology and Youngbo Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngbo Chemical and Hwangkum Steel 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 Hwangkum Steel Technology 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 Hwangkum Steel i.e., Hwangkum Steel and Youngbo Chemical go up and down completely randomly.
Pair Corralation between Hwangkum Steel and Youngbo Chemical
Assuming the 90 days trading horizon Hwangkum Steel Technology is expected to under-perform the Youngbo Chemical. In addition to that, Hwangkum Steel is 1.22 times more volatile than Youngbo Chemical Co. It trades about -0.03 of its total potential returns per unit of risk. Youngbo Chemical Co is currently generating about 0.02 per unit of volatility. If you would invest 365,635 in Youngbo Chemical Co on October 30, 2024 and sell it today you would earn a total of 27,365 from holding Youngbo Chemical Co or generate 7.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hwangkum Steel Technology vs. Youngbo Chemical Co
Performance |
| Timeline |
| Hwangkum Steel Technology |
| Youngbo Chemical |
Hwangkum Steel and Youngbo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwangkum Steel and Youngbo Chemical
The main advantage of trading using opposite Hwangkum Steel and Youngbo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwangkum Steel 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.| Hwangkum Steel vs. Daejoo Electronic Materials | Hwangkum Steel vs. Nable Communications | Hwangkum Steel vs. Ecoplastic | Hwangkum Steel vs. Hyosung Advanced Materials |
| Youngbo Chemical vs. KB Financial Group | Youngbo Chemical vs. Shinhan Financial Group | Youngbo Chemical vs. Hana Financial | Youngbo Chemical vs. Woori Financial Group |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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