Correlation Between Youngchang Chemical and Miwon Chemical
Can any of the company-specific risk be diversified away by investing in both Youngchang Chemical and Miwon Chemical 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 Miwon Chemical 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 Miwon Chemical, you can compare the effects of market volatilities on Youngchang Chemical and Miwon Chemical 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 Miwon Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngchang Chemical and Miwon Chemical.
Diversification Opportunities for Youngchang Chemical and Miwon Chemical
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Youngchang and Miwon is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Youngchang Chemical Co and Miwon Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miwon Chemical 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 Miwon Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miwon Chemical has no effect on the direction of Youngchang Chemical i.e., Youngchang Chemical and Miwon Chemical go up and down completely randomly.
Pair Corralation between Youngchang Chemical and Miwon Chemical
Assuming the 90 days trading horizon Youngchang Chemical Co is expected to under-perform the Miwon Chemical. In addition to that, Youngchang Chemical is 3.99 times more volatile than Miwon Chemical. It trades about -0.3 of its total potential returns per unit of risk. Miwon Chemical is currently generating about -0.22 per unit of volatility. If you would invest 7,990,000 in Miwon Chemical on August 25, 2024 and sell it today you would lose (290,000) from holding Miwon Chemical or give up 3.63% 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. Miwon Chemical
Performance |
| Timeline |
| Youngchang Chemical |
| Miwon Chemical |
Youngchang Chemical and Miwon Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngchang Chemical and Miwon Chemical
The main advantage of trading using opposite Youngchang Chemical and Miwon Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngchang Chemical position performs unexpectedly, Miwon Chemical 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 Miwon Chemical will offset losses from the drop in Miwon Chemical's long position.| Youngchang Chemical vs. Automobile Pc | Youngchang Chemical vs. Yura Tech Co | Youngchang Chemical vs. Eagle Veterinary Technology | Youngchang Chemical vs. RFTech Co |
| Miwon Chemical vs. SBI Investment KOREA | Miwon Chemical vs. Golden Bridge Investment | Miwon Chemical vs. SK Telecom Co | Miwon Chemical vs. KT Submarine Telecom |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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