Correlation Between Youngchang Chemical and DukSan Neolux
Can any of the company-specific risk be diversified away by investing in both Youngchang Chemical and DukSan Neolux 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 DukSan Neolux 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 DukSan Neolux CoLtd, you can compare the effects of market volatilities on Youngchang Chemical and DukSan Neolux 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 DukSan Neolux. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngchang Chemical and DukSan Neolux.
Diversification Opportunities for Youngchang Chemical and DukSan Neolux
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Youngchang and DukSan is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Youngchang Chemical Co and DukSan Neolux CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DukSan Neolux CoLtd 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 DukSan Neolux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DukSan Neolux CoLtd has no effect on the direction of Youngchang Chemical i.e., Youngchang Chemical and DukSan Neolux go up and down completely randomly.
Pair Corralation between Youngchang Chemical and DukSan Neolux
Assuming the 90 days trading horizon Youngchang Chemical Co is expected to under-perform the DukSan Neolux. In addition to that, Youngchang Chemical is 1.04 times more volatile than DukSan Neolux CoLtd. It trades about -0.17 of its total potential returns per unit of risk. DukSan Neolux CoLtd is currently generating about -0.08 per unit of volatility. If you would invest 3,045,000 in DukSan Neolux CoLtd on September 12, 2024 and sell it today you would lose (545,000) from holding DukSan Neolux CoLtd or give up 17.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.31% |
| Values | Daily Returns |
Youngchang Chemical Co vs. DukSan Neolux CoLtd
Performance |
| Timeline |
| Youngchang Chemical |
| DukSan Neolux CoLtd |
Youngchang Chemical and DukSan Neolux Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngchang Chemical and DukSan Neolux
The main advantage of trading using opposite Youngchang Chemical and DukSan Neolux positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngchang Chemical position performs unexpectedly, DukSan Neolux 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 DukSan Neolux will offset losses from the drop in DukSan Neolux's long position.| Youngchang Chemical vs. LG Chem | Youngchang Chemical vs. Chunbo Co | Youngchang Chemical vs. DukSan Neolux CoLtd | Youngchang Chemical vs. Hyosung Chemical Corp |
| DukSan Neolux vs. LG Chem | DukSan Neolux vs. Chunbo Co | DukSan Neolux vs. Hyosung Chemical Corp | DukSan Neolux vs. LIG ES SPAC |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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