Correlation Between Hanjoo Light and Youl Chon
Can any of the company-specific risk be diversified away by investing in both Hanjoo Light 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 Hanjoo Light and Youl Chon 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 Youl Chon Chemical, you can compare the effects of market volatilities on Hanjoo Light 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 Hanjoo Light with a short position of Youl Chon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjoo Light and Youl Chon.
Diversification Opportunities for Hanjoo Light and Youl Chon
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hanjoo and Youl is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Hanjoo Light Metal 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 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 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 Hanjoo Light i.e., Hanjoo Light and Youl Chon go up and down completely randomly.
Pair Corralation between Hanjoo Light and Youl Chon
Assuming the 90 days trading horizon Hanjoo Light Metal is expected to under-perform the Youl Chon. But the stock apears to be less risky and, when comparing its historical volatility, Hanjoo Light Metal is 5.1 times less risky than Youl Chon. The stock trades about -0.44 of its potential returns per unit of risk. The Youl Chon Chemical is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 3,060,000 in Youl Chon Chemical on November 28, 2024 and sell it today you would lose (140,000) from holding Youl Chon Chemical or give up 4.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjoo Light Metal vs. Youl Chon Chemical
Performance |
| Timeline |
| Hanjoo Light Metal |
| Youl Chon Chemical |
Hanjoo Light and Youl Chon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjoo Light and Youl Chon
The main advantage of trading using opposite Hanjoo Light and Youl Chon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjoo Light 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.| Hanjoo Light vs. Dongbu Insurance Co | Hanjoo Light vs. Digital Multimedia Technology | Hanjoo Light vs. FNC Entertainment Co | Hanjoo Light vs. Koryo Credit Information |
| Youl Chon vs. Daesung Hi Tech Co | Youl Chon vs. Busan Industrial Co | Youl Chon vs. Formetal Co | Youl Chon vs. DB Insurance 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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