Correlation Between Hanjoo Light and Youngsin Metal
Can any of the company-specific risk be diversified away by investing in both Hanjoo Light and Youngsin Metal 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 Hanjoo Light and Youngsin Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanjoo Light Metal and Youngsin Metal Industrial, you can compare the effects of market volatilities on Hanjoo Light and Youngsin Metal 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 Hanjoo Light with a short position of Youngsin Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjoo Light and Youngsin Metal.
Diversification Opportunities for Hanjoo Light and Youngsin Metal
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hanjoo and Youngsin is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Hanjoo Light Metal and Youngsin Metal Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngsin Metal Industrial and Hanjoo Light 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 Hanjoo Light Metal are associated (or correlated) with Youngsin Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youngsin Metal Industrial has no effect on the direction of Hanjoo Light i.e., Hanjoo Light and Youngsin Metal go up and down completely randomly.
Pair Corralation between Hanjoo Light and Youngsin Metal
Assuming the 90 days trading horizon Hanjoo Light Metal is expected to under-perform the Youngsin Metal. In addition to that, Hanjoo Light is 1.92 times more volatile than Youngsin Metal Industrial. It trades about -0.06 of its total potential returns per unit of risk. Youngsin Metal Industrial is currently generating about -0.01 per unit of volatility. If you would invest 275,500 in Youngsin Metal Industrial on August 29, 2024 and sell it today you would lose (59,000) from holding Youngsin Metal Industrial or give up 21.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 93.79% |
| Values | Daily Returns |
Hanjoo Light Metal vs. Youngsin Metal Industrial
Performance |
| Timeline |
| Hanjoo Light Metal |
| Youngsin Metal Industrial |
Hanjoo Light and Youngsin Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjoo Light and Youngsin Metal
The main advantage of trading using opposite Hanjoo Light and Youngsin Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjoo Light position performs unexpectedly, Youngsin Metal 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 Youngsin Metal will offset losses from the drop in Youngsin Metal's long position.| Hanjoo Light vs. Samsung Electronics Co | Hanjoo Light vs. Samsung Electronics Co | Hanjoo Light vs. LG Energy Solution | Hanjoo Light vs. SK Hynix |
| Youngsin Metal vs. Samsung Electronics Co | Youngsin Metal vs. Samsung Electronics Co | Youngsin Metal vs. KB Financial Group | Youngsin Metal vs. Shinhan Financial Group |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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