Correlation Between Korea New and Youngsin Metal
Can any of the company-specific risk be diversified away by investing in both Korea New and Youngsin 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 Korea New and Youngsin Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea New Network and Youngsin Metal Industrial, you can compare the effects of market volatilities on Korea New and Youngsin 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 Korea New with a short position of Youngsin Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea New and Youngsin Metal.
Diversification Opportunities for Korea New and Youngsin Metal
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Korea and Youngsin is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Korea New Network and Youngsin Metal Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngsin Metal Industrial and Korea New 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 Korea New Network are associated (or correlated) with Youngsin Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youngsin Metal Industrial has no effect on the direction of Korea New i.e., Korea New and Youngsin Metal go up and down completely randomly.
Pair Corralation between Korea New and Youngsin Metal
Assuming the 90 days trading horizon Korea New Network is expected to generate 0.84 times more return on investment than Youngsin Metal. However, Korea New Network is 1.19 times less risky than Youngsin Metal. It trades about 0.02 of its potential returns per unit of risk. Youngsin Metal Industrial is currently generating about -0.19 per unit of risk. If you would invest 76,500 in Korea New Network on September 2, 2024 and sell it today you would earn a total of 600.00 from holding Korea New Network or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea New Network vs. Youngsin Metal Industrial
Performance |
| Timeline |
| Korea New Network |
| Youngsin Metal Industrial |
Korea New and Youngsin Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea New and Youngsin Metal
The main advantage of trading using opposite Korea New and Youngsin Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea New position performs unexpectedly, Youngsin 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 Youngsin Metal will offset losses from the drop in Youngsin Metal's long position.| Korea New vs. Hanshin Construction Co | Korea New vs. Netmarble Games Corp | Korea New vs. Seohee Construction Co | Korea New vs. Sungdo Engineering Construction |
| Youngsin Metal vs. Digital Power Communications | Youngsin Metal vs. Iljin Display | Youngsin Metal vs. Lake Materials Co | Youngsin Metal vs. National Plastic 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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