Correlation Between Taewoong Logistics and Youl Chon
Can any of the company-specific risk be diversified away by investing in both Taewoong Logistics and Youl Chon 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 Taewoong Logistics and Youl Chon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taewoong Logistics CoLtd and Youl Chon Chemical, you can compare the effects of market volatilities on Taewoong Logistics and Youl Chon 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 Taewoong Logistics with a short position of Youl Chon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taewoong Logistics and Youl Chon.
Diversification Opportunities for Taewoong Logistics and Youl Chon
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Taewoong and Youl is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Taewoong Logistics CoLtd and Youl Chon Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youl Chon Chemical and Taewoong Logistics 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 Taewoong Logistics CoLtd are associated (or correlated) with Youl Chon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youl Chon Chemical has no effect on the direction of Taewoong Logistics i.e., Taewoong Logistics and Youl Chon go up and down completely randomly.
Pair Corralation between Taewoong Logistics and Youl Chon
Assuming the 90 days trading horizon Taewoong Logistics CoLtd is expected to under-perform the Youl Chon. But the stock apears to be less risky and, when comparing its historical volatility, Taewoong Logistics CoLtd is 1.32 times less risky than Youl Chon. The stock trades about -0.02 of its potential returns per unit of risk. The Youl Chon Chemical is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 3,607,462 in Youl Chon Chemical on August 31, 2024 and sell it today you would lose (1,242,462) from holding Youl Chon Chemical or give up 34.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taewoong Logistics CoLtd vs. Youl Chon Chemical
Performance |
| Timeline |
| Taewoong Logistics CoLtd |
| Youl Chon Chemical |
Taewoong Logistics and Youl Chon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taewoong Logistics and Youl Chon
The main advantage of trading using opposite Taewoong Logistics and Youl Chon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taewoong Logistics position performs unexpectedly, Youl Chon 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 Youl Chon will offset losses from the drop in Youl Chon's long position.| Taewoong Logistics vs. Youl Chon Chemical | Taewoong Logistics vs. Daehan Synthetic Fiber | Taewoong Logistics vs. Daewoo Engineering Construction | Taewoong Logistics vs. Shinsegae Engineering Construction |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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