Correlation Between Dongwoo Farm and Youngbo Chemical
Can any of the company-specific risk be diversified away by investing in both Dongwoo Farm 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 Dongwoo Farm and Youngbo Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongwoo Farm To and Youngbo Chemical Co, you can compare the effects of market volatilities on Dongwoo Farm 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 Dongwoo Farm with a short position of Youngbo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwoo Farm and Youngbo Chemical.
Diversification Opportunities for Dongwoo Farm and Youngbo Chemical
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dongwoo and Youngbo is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Dongwoo Farm To and Youngbo Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngbo Chemical and Dongwoo Farm 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 Dongwoo Farm To 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 Dongwoo Farm i.e., Dongwoo Farm and Youngbo Chemical go up and down completely randomly.
Pair Corralation between Dongwoo Farm and Youngbo Chemical
Assuming the 90 days trading horizon Dongwoo Farm To is expected to under-perform the Youngbo Chemical. In addition to that, Dongwoo Farm is 1.03 times more volatile than Youngbo Chemical Co. It trades about -0.04 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 352,021 in Youngbo Chemical Co on October 23, 2024 and sell it today you would earn a total of 21,979 from holding Youngbo Chemical Co or generate 6.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongwoo Farm To vs. Youngbo Chemical Co
Performance |
| Timeline |
| Dongwoo Farm To |
| Youngbo Chemical |
Dongwoo Farm and Youngbo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwoo Farm and Youngbo Chemical
The main advantage of trading using opposite Dongwoo Farm and Youngbo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwoo Farm 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.| Dongwoo Farm vs. Koryo Credit Information | Dongwoo Farm vs. PLAYWITH | Dongwoo Farm vs. Moadata Co | Dongwoo Farm vs. Ssangyong Information Communication |
| Youngbo Chemical vs. Tuksu Engineering ConstructionLtd | Youngbo Chemical vs. Keyang Electric Machinery | Youngbo Chemical vs. Dongwoo Farm To | Youngbo Chemical vs. Camus Engineering Construction |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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