Correlation Between Youngchang Chemical and Sambo Corrugated
Can any of the company-specific risk be diversified away by investing in both Youngchang Chemical and Sambo Corrugated 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 Sambo Corrugated 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 Sambo Corrugated Board, you can compare the effects of market volatilities on Youngchang Chemical and Sambo Corrugated 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 Sambo Corrugated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngchang Chemical and Sambo Corrugated.
Diversification Opportunities for Youngchang Chemical and Sambo Corrugated
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Youngchang and Sambo is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Youngchang Chemical Co and Sambo Corrugated Board in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sambo Corrugated Board 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 Sambo Corrugated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sambo Corrugated Board has no effect on the direction of Youngchang Chemical i.e., Youngchang Chemical and Sambo Corrugated go up and down completely randomly.
Pair Corralation between Youngchang Chemical and Sambo Corrugated
Assuming the 90 days trading horizon Youngchang Chemical Co is expected to generate 5.2 times more return on investment than Sambo Corrugated. However, Youngchang Chemical is 5.2 times more volatile than Sambo Corrugated Board. It trades about 0.18 of its potential returns per unit of risk. Sambo Corrugated Board is currently generating about 0.01 per unit of risk. If you would invest 1,228,000 in Youngchang Chemical Co on October 7, 2024 and sell it today you would earn a total of 173,000 from holding Youngchang Chemical Co or generate 14.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youngchang Chemical Co vs. Sambo Corrugated Board
Performance |
| Timeline |
| Youngchang Chemical |
| Sambo Corrugated Board |
Youngchang Chemical and Sambo Corrugated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngchang Chemical and Sambo Corrugated
The main advantage of trading using opposite Youngchang Chemical and Sambo Corrugated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngchang Chemical position performs unexpectedly, Sambo Corrugated 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 Sambo Corrugated will offset losses from the drop in Sambo Corrugated's long position.| Youngchang Chemical vs. LG Chem | Youngchang Chemical vs. Chunbo Co | Youngchang Chemical vs. DukSan Neolux CoLtd | Youngchang Chemical vs. Hyosung Chemical Corp |
| Sambo Corrugated vs. Innowireless Co | Sambo Corrugated vs. Tway Air Co | Sambo Corrugated vs. Jeju Air Co | Sambo Corrugated vs. Nable Communications |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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