Correlation Between Youngchang Chemical and Nasmedia
Can any of the company-specific risk be diversified away by investing in both Youngchang Chemical and Nasmedia 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 Nasmedia 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 Nasmedia Co, you can compare the effects of market volatilities on Youngchang Chemical and Nasmedia 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 Nasmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngchang Chemical and Nasmedia.
Diversification Opportunities for Youngchang Chemical and Nasmedia
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Youngchang and Nasmedia is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Youngchang Chemical Co and Nasmedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasmedia 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 Nasmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasmedia has no effect on the direction of Youngchang Chemical i.e., Youngchang Chemical and Nasmedia go up and down completely randomly.
Pair Corralation between Youngchang Chemical and Nasmedia
Assuming the 90 days trading horizon Youngchang Chemical Co is expected to under-perform the Nasmedia. In addition to that, Youngchang Chemical is 2.04 times more volatile than Nasmedia Co. It trades about -0.26 of its total potential returns per unit of risk. Nasmedia Co is currently generating about -0.16 per unit of volatility. If you would invest 1,543,000 in Nasmedia Co on August 29, 2024 and sell it today you would lose (87,000) from holding Nasmedia Co or give up 5.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youngchang Chemical Co vs. Nasmedia Co
Performance |
| Timeline |
| Youngchang Chemical |
| Nasmedia |
Youngchang Chemical and Nasmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngchang Chemical and Nasmedia
The main advantage of trading using opposite Youngchang Chemical and Nasmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngchang Chemical position performs unexpectedly, Nasmedia 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 Nasmedia will offset losses from the drop in Nasmedia's long position.| Youngchang Chemical vs. Dongbu Steel Co | Youngchang Chemical vs. J Steel Co | Youngchang Chemical vs. Ni Steel | Youngchang Chemical vs. Sungchang Autotech 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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