Correlation Between Sungchang Autotech and Youngchang Chemical
Can any of the company-specific risk be diversified away by investing in both Sungchang Autotech and Youngchang 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 Sungchang Autotech and Youngchang Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sungchang Autotech Co and Youngchang Chemical Co, you can compare the effects of market volatilities on Sungchang Autotech and Youngchang 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 Sungchang Autotech with a short position of Youngchang Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungchang Autotech and Youngchang Chemical.
Diversification Opportunities for Sungchang Autotech and Youngchang Chemical
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sungchang and Youngchang is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sungchang Autotech Co and Youngchang Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngchang Chemical and Sungchang Autotech 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 Sungchang Autotech Co are associated (or correlated) with Youngchang Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youngchang Chemical has no effect on the direction of Sungchang Autotech i.e., Sungchang Autotech and Youngchang Chemical go up and down completely randomly.
Pair Corralation between Sungchang Autotech and Youngchang Chemical
Assuming the 90 days trading horizon Sungchang Autotech Co is expected to generate 0.84 times more return on investment than Youngchang Chemical. However, Sungchang Autotech Co is 1.18 times less risky than Youngchang Chemical. It trades about -0.17 of its potential returns per unit of risk. Youngchang Chemical Co is currently generating about -0.29 per unit of risk. If you would invest 430,500 in Sungchang Autotech Co on September 1, 2024 and sell it today you would lose (46,000) from holding Sungchang Autotech Co or give up 10.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungchang Autotech Co vs. Youngchang Chemical Co
Performance |
| Timeline |
| Sungchang Autotech |
| Youngchang Chemical |
Sungchang Autotech and Youngchang Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungchang Autotech and Youngchang Chemical
The main advantage of trading using opposite Sungchang Autotech and Youngchang Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungchang Autotech position performs unexpectedly, Youngchang 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 Youngchang Chemical will offset losses from the drop in Youngchang Chemical's long position.| Sungchang Autotech vs. Konan Technology | Sungchang Autotech vs. Korea Shipbuilding Offshore | Sungchang Autotech vs. Nasmedia Co | Sungchang Autotech vs. JYP Entertainment Corp |
| Youngchang Chemical vs. LG Chem | Youngchang Chemical vs. Chunbo Co | Youngchang Chemical vs. Hyosung Chemical Corp | Youngchang Chemical vs. LIG ES SPAC |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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