Correlation Between Youngchang Chemical and Synopex
Can any of the company-specific risk be diversified away by investing in both Youngchang Chemical and Synopex 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 Synopex 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 Synopex, you can compare the effects of market volatilities on Youngchang Chemical and Synopex 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 Synopex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngchang Chemical and Synopex.
Diversification Opportunities for Youngchang Chemical and Synopex
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Youngchang and Synopex is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Youngchang Chemical Co and Synopex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synopex 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 Synopex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synopex has no effect on the direction of Youngchang Chemical i.e., Youngchang Chemical and Synopex go up and down completely randomly.
Pair Corralation between Youngchang Chemical and Synopex
Assuming the 90 days trading horizon Youngchang Chemical is expected to generate 2.58 times less return on investment than Synopex. In addition to that, Youngchang Chemical is 1.04 times more volatile than Synopex. It trades about 0.02 of its total potential returns per unit of risk. Synopex is currently generating about 0.07 per unit of volatility. If you would invest 247,637 in Synopex on September 3, 2024 and sell it today you would earn a total of 387,363 from holding Synopex or generate 156.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youngchang Chemical Co vs. Synopex
Performance |
| Timeline |
| Youngchang Chemical |
| Synopex |
Youngchang Chemical and Synopex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngchang Chemical and Synopex
The main advantage of trading using opposite Youngchang Chemical and Synopex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngchang Chemical position performs unexpectedly, Synopex 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 Synopex will offset losses from the drop in Synopex's long position.| Youngchang Chemical vs. LG Chem | Youngchang Chemical vs. DukSan Neolux CoLtd | Youngchang Chemical vs. Hyosung Chemical Corp | Youngchang Chemical vs. LIG ES SPAC |
| Synopex vs. Miwon Chemical | Synopex vs. Innowireless Co | Synopex vs. InnoTherapy | Synopex vs. Youngchang Chemical Co |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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