Correlation Between Youngchang Chemical and PanGen Biotech
Can any of the company-specific risk be diversified away by investing in both Youngchang Chemical and PanGen Biotech 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 PanGen Biotech 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 PanGen Biotech, you can compare the effects of market volatilities on Youngchang Chemical and PanGen Biotech 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 PanGen Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngchang Chemical and PanGen Biotech.
Diversification Opportunities for Youngchang Chemical and PanGen Biotech
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Youngchang and PanGen is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Youngchang Chemical Co and PanGen Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PanGen Biotech 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 PanGen Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PanGen Biotech has no effect on the direction of Youngchang Chemical i.e., Youngchang Chemical and PanGen Biotech go up and down completely randomly.
Pair Corralation between Youngchang Chemical and PanGen Biotech
Assuming the 90 days trading horizon Youngchang Chemical Co is expected to generate 1.49 times more return on investment than PanGen Biotech. However, Youngchang Chemical is 1.49 times more volatile than PanGen Biotech. It trades about 0.03 of its potential returns per unit of risk. PanGen Biotech is currently generating about 0.02 per unit of risk. If you would invest 1,194,104 in Youngchang Chemical Co on August 30, 2024 and sell it today you would earn a total of 157,896 from holding Youngchang Chemical Co or generate 13.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youngchang Chemical Co vs. PanGen Biotech
Performance |
| Timeline |
| Youngchang Chemical |
| PanGen Biotech |
Youngchang Chemical and PanGen Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youngchang Chemical and PanGen Biotech
The main advantage of trading using opposite Youngchang Chemical and PanGen Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngchang Chemical position performs unexpectedly, PanGen Biotech 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 PanGen Biotech will offset losses from the drop in PanGen Biotech's long position.| Youngchang Chemical vs. LG Chem | Youngchang Chemical vs. LIG ES SPAC | Youngchang Chemical vs. PH Tech Co | Youngchang Chemical vs. Miwon Chemical |
| PanGen Biotech vs. Youngchang Chemical Co | PanGen Biotech vs. Hyundai Home Shopping | PanGen Biotech vs. Namhae Chemical | PanGen Biotech vs. Cuckoo Homesys 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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