Correlation Between Youngchang Chemical and Hancom
Can any of the company-specific risk be diversified away by investing in both Youngchang Chemical and Hancom 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 Hancom 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 Hancom Inc, you can compare the effects of market volatilities on Youngchang Chemical and Hancom 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 Hancom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngchang Chemical and Hancom.
Diversification Opportunities for Youngchang Chemical and Hancom
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Youngchang and Hancom is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Youngchang Chemical Co and Hancom Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hancom Inc 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 Hancom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hancom Inc has no effect on the direction of Youngchang Chemical i.e., Youngchang Chemical and Hancom go up and down completely randomly.
Pair Corralation between Youngchang Chemical and Hancom
Assuming the 90 days trading horizon Youngchang Chemical Co is expected to under-perform the Hancom. In addition to that, Youngchang Chemical is 1.21 times more volatile than Hancom Inc. It trades about -0.1 of its total potential returns per unit of risk. Hancom Inc is currently generating about 0.0 per unit of volatility. If you would invest 2,455,000 in Hancom Inc on September 5, 2024 and sell it today you would lose (230,000) from holding Hancom Inc or give up 9.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youngchang Chemical Co vs. Hancom Inc
Performance |
| Timeline |
| Youngchang Chemical |
| Hancom Inc |
Youngchang Chemical and Hancom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngchang Chemical and Hancom
The main advantage of trading using opposite Youngchang Chemical and Hancom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngchang Chemical position performs unexpectedly, Hancom 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 Hancom will offset losses from the drop in Hancom's long position.The idea behind Youngchang Chemical Co and Hancom Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Hancom vs. Sung Bo Chemicals | Hancom vs. Youngchang Chemical Co | Hancom vs. Jeju Semiconductor Corp | Hancom vs. Daehan Synthetic Fiber |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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