Correlation Between IQuest and Youngbo Chemical
Can any of the company-specific risk be diversified away by investing in both IQuest 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 IQuest and Youngbo Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IQuest Co and Youngbo Chemical Co, you can compare the effects of market volatilities on IQuest 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 IQuest with a short position of Youngbo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQuest and Youngbo Chemical.
Diversification Opportunities for IQuest and Youngbo Chemical
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IQuest and Youngbo is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding IQuest Co and Youngbo Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngbo Chemical and IQuest 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 IQuest Co 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 IQuest i.e., IQuest and Youngbo Chemical go up and down completely randomly.
Pair Corralation between IQuest and Youngbo Chemical
Assuming the 90 days trading horizon IQuest Co is expected to generate 3.72 times more return on investment than Youngbo Chemical. However, IQuest is 3.72 times more volatile than Youngbo Chemical Co. It trades about 0.12 of its potential returns per unit of risk. Youngbo Chemical Co is currently generating about 0.07 per unit of risk. If you would invest 223,000 in IQuest Co on September 5, 2024 and sell it today you would earn a total of 19,500 from holding IQuest Co or generate 8.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IQuest Co vs. Youngbo Chemical Co
Performance |
| Timeline |
| IQuest |
| Youngbo Chemical |
IQuest and Youngbo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IQuest and Youngbo Chemical
The main advantage of trading using opposite IQuest and Youngbo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQuest 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.| IQuest vs. Youngbo Chemical Co | IQuest vs. BGF Retail Co | IQuest vs. Tae Kyung Chemical | IQuest vs. Seoul Broadcasting System |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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