Correlation Between Youngchang Chemical and Hanwha Life
Can any of the company-specific risk be diversified away by investing in both Youngchang Chemical and Hanwha Life 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 Hanwha Life 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 Hanwha Life Insurance, you can compare the effects of market volatilities on Youngchang Chemical and Hanwha Life 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 Hanwha Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngchang Chemical and Hanwha Life.
Diversification Opportunities for Youngchang Chemical and Hanwha Life
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Youngchang and Hanwha is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Youngchang Chemical Co and Hanwha Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha Life Insurance 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 Hanwha Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha Life Insurance has no effect on the direction of Youngchang Chemical i.e., Youngchang Chemical and Hanwha Life go up and down completely randomly.
Pair Corralation between Youngchang Chemical and Hanwha Life
Assuming the 90 days trading horizon Youngchang Chemical Co is expected to generate 6.7 times more return on investment than Hanwha Life. However, Youngchang Chemical is 6.7 times more volatile than Hanwha Life Insurance. It trades about 0.54 of its potential returns per unit of risk. Hanwha Life Insurance is currently generating about -0.13 per unit of risk. If you would invest 1,322,000 in Youngchang Chemical Co on October 25, 2024 and sell it today you would earn a total of 943,000 from holding Youngchang Chemical Co or generate 71.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youngchang Chemical Co vs. Hanwha Life Insurance
Performance |
| Timeline |
| Youngchang Chemical |
| Hanwha Life Insurance |
Youngchang Chemical and Hanwha Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngchang Chemical and Hanwha Life
The main advantage of trading using opposite Youngchang Chemical and Hanwha Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngchang Chemical position performs unexpectedly, Hanwha Life 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 Hanwha Life will offset losses from the drop in Hanwha Life's long position.| Youngchang Chemical vs. SK Chemicals Co | Youngchang Chemical vs. Eugene Technology CoLtd | Youngchang Chemical vs. Seoam Machinery Industry | Youngchang Chemical vs. Bosung Power Technology |
| Hanwha Life vs. Hanshin Construction Co | Hanwha Life vs. Lotte Non Life Insurance | Hanwha Life vs. Shinsegae Engineering Construction | Hanwha Life vs. Wireless Power Amplifier |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |