Correlation Between Youngchang Chemical and Ni Steel
Can any of the company-specific risk be diversified away by investing in both Youngchang Chemical and Ni Steel 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 Ni Steel 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 Ni Steel, you can compare the effects of market volatilities on Youngchang Chemical and Ni Steel 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 Ni Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngchang Chemical and Ni Steel.
Diversification Opportunities for Youngchang Chemical and Ni Steel
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Youngchang and 008260 is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Youngchang Chemical Co and Ni Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ni Steel 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 Ni Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ni Steel has no effect on the direction of Youngchang Chemical i.e., Youngchang Chemical and Ni Steel go up and down completely randomly.
Pair Corralation between Youngchang Chemical and Ni Steel
Assuming the 90 days trading horizon Youngchang Chemical Co is expected to under-perform the Ni Steel. But the stock apears to be less risky and, when comparing its historical volatility, Youngchang Chemical Co is 1.15 times less risky than Ni Steel. The stock trades about -0.3 of its potential returns per unit of risk. The Ni Steel is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 381,000 in Ni Steel on August 25, 2024 and sell it today you would earn a total of 9,500 from holding Ni Steel or generate 2.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youngchang Chemical Co vs. Ni Steel
Performance |
| Timeline |
| Youngchang Chemical |
| Ni Steel |
Youngchang Chemical and Ni Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngchang Chemical and Ni Steel
The main advantage of trading using opposite Youngchang Chemical and Ni Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngchang Chemical position performs unexpectedly, Ni Steel 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 Ni Steel will offset losses from the drop in Ni Steel's long position.| Youngchang Chemical vs. Automobile Pc | Youngchang Chemical vs. Yura Tech Co | Youngchang Chemical vs. Eagle Veterinary Technology | Youngchang Chemical vs. RFTech Co |
| Ni Steel vs. Youngchang Chemical Co | Ni Steel vs. Chin Yang Chemical | Ni Steel vs. MediaZen | Ni Steel vs. Korea Petro Chemical |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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