Correlation Between Daewoo SBI and Youngbo Chemical
Can any of the company-specific risk be diversified away by investing in both Daewoo SBI 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 Daewoo SBI and Youngbo Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daewoo SBI SPAC and Youngbo Chemical Co, you can compare the effects of market volatilities on Daewoo SBI 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 Daewoo SBI with a short position of Youngbo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewoo SBI and Youngbo Chemical.
Diversification Opportunities for Daewoo SBI and Youngbo Chemical
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daewoo and Youngbo is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Daewoo SBI SPAC and Youngbo Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngbo Chemical and Daewoo SBI 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 Daewoo SBI SPAC 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 Daewoo SBI i.e., Daewoo SBI and Youngbo Chemical go up and down completely randomly.
Pair Corralation between Daewoo SBI and Youngbo Chemical
Assuming the 90 days trading horizon Daewoo SBI SPAC is expected to under-perform the Youngbo Chemical. In addition to that, Daewoo SBI is 1.12 times more volatile than Youngbo Chemical Co. It trades about -0.18 of its total potential returns per unit of risk. Youngbo Chemical Co is currently generating about 0.41 per unit of volatility. If you would invest 362,500 in Youngbo Chemical Co on November 3, 2024 and sell it today you would earn a total of 46,000 from holding Youngbo Chemical Co or generate 12.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daewoo SBI SPAC vs. Youngbo Chemical Co
Performance |
| Timeline |
| Daewoo SBI SPAC |
| Youngbo Chemical |
Daewoo SBI and Youngbo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewoo SBI and Youngbo Chemical
The main advantage of trading using opposite Daewoo SBI and Youngbo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewoo SBI 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.| Daewoo SBI vs. Jinro Distillers Co | Daewoo SBI vs. INSUN Environmental New | Daewoo SBI vs. Daejung Chemicals Metals | Daewoo SBI vs. Shin Steel Co |
| Youngbo Chemical vs. AptaBio Therapeutics | Youngbo Chemical vs. Daewoo SBI SPAC | Youngbo Chemical vs. Dream Security co | Youngbo Chemical vs. Microfriend |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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