Correlation Between Daejung Chemicals and Young Poong
Can any of the company-specific risk be diversified away by investing in both Daejung Chemicals and Young Poong 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 Daejung Chemicals and Young Poong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daejung Chemicals Metals and Young Poong Corp, you can compare the effects of market volatilities on Daejung Chemicals and Young Poong 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 Daejung Chemicals with a short position of Young Poong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daejung Chemicals and Young Poong.
Diversification Opportunities for Daejung Chemicals and Young Poong
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Daejung and Young is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Daejung Chemicals Metals and Young Poong Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Young Poong Corp and Daejung Chemicals 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 Daejung Chemicals Metals are associated (or correlated) with Young Poong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Young Poong Corp has no effect on the direction of Daejung Chemicals i.e., Daejung Chemicals and Young Poong go up and down completely randomly.
Pair Corralation between Daejung Chemicals and Young Poong
Assuming the 90 days trading horizon Daejung Chemicals Metals is expected to generate 0.73 times more return on investment than Young Poong. However, Daejung Chemicals Metals is 1.38 times less risky than Young Poong. It trades about 0.2 of its potential returns per unit of risk. Young Poong Corp is currently generating about 0.06 per unit of risk. If you would invest 1,267,068 in Daejung Chemicals Metals on October 14, 2024 and sell it today you would earn a total of 49,932 from holding Daejung Chemicals Metals or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daejung Chemicals Metals vs. Young Poong Corp
Performance |
| Timeline |
| Daejung Chemicals Metals |
| Young Poong Corp |
Daejung Chemicals and Young Poong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daejung Chemicals and Young Poong
The main advantage of trading using opposite Daejung Chemicals and Young Poong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daejung Chemicals position performs unexpectedly, Young Poong 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 Young Poong will offset losses from the drop in Young Poong's long position.| Daejung Chemicals vs. Next Entertainment World | Daejung Chemicals vs. Choil Aluminum | Daejung Chemicals vs. Digital Multimedia Technology | Daejung Chemicals vs. DC Media Co |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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