Correlation Between EMnet and Youngbo Chemical
Can any of the company-specific risk be diversified away by investing in both EMnet and Youngbo 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 EMnet and Youngbo Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eMnet Inc and Youngbo Chemical Co, you can compare the effects of market volatilities on EMnet and Youngbo 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 EMnet with a short position of Youngbo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMnet and Youngbo Chemical.
Diversification Opportunities for EMnet and Youngbo Chemical
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EMnet and Youngbo is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding eMnet Inc and Youngbo Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngbo Chemical and EMnet 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 eMnet Inc are associated (or correlated) with Youngbo Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youngbo Chemical has no effect on the direction of EMnet i.e., EMnet and Youngbo Chemical go up and down completely randomly.
Pair Corralation between EMnet and Youngbo Chemical
Assuming the 90 days trading horizon eMnet Inc is expected to under-perform the Youngbo Chemical. In addition to that, EMnet is 2.47 times more volatile than Youngbo Chemical Co. It trades about -0.01 of its total potential returns per unit of risk. Youngbo Chemical Co is currently generating about 0.02 per unit of volatility. If you would invest 348,131 in Youngbo Chemical Co on October 9, 2024 and sell it today you would earn a total of 21,869 from holding Youngbo Chemical Co or generate 6.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
eMnet Inc vs. Youngbo Chemical Co
Performance |
| Timeline |
| eMnet Inc |
| Youngbo Chemical |
EMnet and Youngbo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMnet and Youngbo Chemical
The main advantage of trading using opposite EMnet and Youngbo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMnet position performs unexpectedly, Youngbo 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 Youngbo Chemical will offset losses from the drop in Youngbo Chemical's long position.The idea behind eMnet Inc and Youngbo Chemical Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Youngbo Chemical vs. Eagle Veterinary Technology | Youngbo Chemical vs. Dongil Technology | Youngbo Chemical vs. HB Technology TD | Youngbo Chemical vs. Dgb Financial |
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 CEOs Directory module to screen CEOs from public companies around the world.
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