Correlation Between Chin Yang and Korea Petro
Can any of the company-specific risk be diversified away by investing in both Chin Yang and Korea Petro 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 Chin Yang and Korea Petro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chin Yang Chemical and Korea Petro Chemical, you can compare the effects of market volatilities on Chin Yang and Korea Petro 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 Chin Yang with a short position of Korea Petro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chin Yang and Korea Petro.
Diversification Opportunities for Chin Yang and Korea Petro
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chin and Korea is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Chin Yang Chemical and Korea Petro Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Petro Chemical and Chin Yang 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 Chin Yang Chemical are associated (or correlated) with Korea Petro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Petro Chemical has no effect on the direction of Chin Yang i.e., Chin Yang and Korea Petro go up and down completely randomly.
Pair Corralation between Chin Yang and Korea Petro
Assuming the 90 days trading horizon Chin Yang Chemical is expected to generate 0.83 times more return on investment than Korea Petro. However, Chin Yang Chemical is 1.2 times less risky than Korea Petro. It trades about -0.02 of its potential returns per unit of risk. Korea Petro Chemical is currently generating about -0.04 per unit of risk. If you would invest 334,792 in Chin Yang Chemical on September 3, 2024 and sell it today you would lose (113,292) from holding Chin Yang Chemical or give up 33.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chin Yang Chemical vs. Korea Petro Chemical
Performance |
| Timeline |
| Chin Yang Chemical |
| Korea Petro Chemical |
Chin Yang and Korea Petro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chin Yang and Korea Petro
The main advantage of trading using opposite Chin Yang and Korea Petro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chin Yang position performs unexpectedly, Korea Petro 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 Korea Petro will offset losses from the drop in Korea Petro's long position.| Chin Yang vs. AptaBio Therapeutics | Chin Yang vs. Daewoo SBI SPAC | Chin Yang vs. Dream Security co | Chin Yang vs. Microfriend |
| Korea Petro vs. Lotte Non Life Insurance | Korea Petro vs. Dong A Steel Technology | Korea Petro vs. Samsung Life Insurance | Korea Petro vs. Jb Financial |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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