Correlation Between Youngchang Chemical and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Youngchang Chemical and Samsung Electronics 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 Youngchang Chemical and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Youngchang Chemical Co and Samsung Electronics Co, you can compare the effects of market volatilities on Youngchang Chemical and Samsung Electronics 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 Youngchang Chemical with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngchang Chemical and Samsung Electronics.
Diversification Opportunities for Youngchang Chemical and Samsung Electronics
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Youngchang and Samsung is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Youngchang Chemical Co and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Youngchang Chemical 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 Youngchang Chemical Co are associated (or correlated) with Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Youngchang Chemical i.e., Youngchang Chemical and Samsung Electronics go up and down completely randomly.
Pair Corralation between Youngchang Chemical and Samsung Electronics
Assuming the 90 days trading horizon Youngchang Chemical Co is expected to generate 2.85 times more return on investment than Samsung Electronics. However, Youngchang Chemical is 2.85 times more volatile than Samsung Electronics Co. It trades about 0.03 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.03 per unit of risk. If you would invest 1,153,635 in Youngchang Chemical Co on August 31, 2024 and sell it today you would earn a total of 121,365 from holding Youngchang Chemical Co or generate 10.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youngchang Chemical Co vs. Samsung Electronics Co
Performance |
| Timeline |
| Youngchang Chemical |
| Samsung Electronics |
Youngchang Chemical and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngchang Chemical and Samsung Electronics
The main advantage of trading using opposite Youngchang Chemical and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngchang Chemical position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| Youngchang Chemical vs. LG Chem | Youngchang Chemical vs. Chunbo Co | Youngchang Chemical vs. Hyosung Chemical Corp | Youngchang Chemical vs. LIG ES SPAC |
| Samsung Electronics vs. Dongsin Engineering Construction | Samsung Electronics vs. Doosan Fuel Cell | Samsung Electronics vs. Daishin Balance 1 | Samsung Electronics vs. Total Soft Bank |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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