Correlation Between YOUNGHWA TECH and CBI
Can any of the company-specific risk be diversified away by investing in both YOUNGHWA TECH and CBI 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 YOUNGHWA TECH and CBI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YOUNGHWA TECH Co and CBI Co, you can compare the effects of market volatilities on YOUNGHWA TECH and CBI 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 YOUNGHWA TECH with a short position of CBI. Check out your portfolio center. Please also check ongoing floating volatility patterns of YOUNGHWA TECH and CBI.
Diversification Opportunities for YOUNGHWA TECH and CBI
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between YOUNGHWA and CBI is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding YOUNGHWA TECH Co and CBI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBI Co and YOUNGHWA TECH 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 YOUNGHWA TECH Co are associated (or correlated) with CBI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBI Co has no effect on the direction of YOUNGHWA TECH i.e., YOUNGHWA TECH and CBI go up and down completely randomly.
Pair Corralation between YOUNGHWA TECH and CBI
Assuming the 90 days trading horizon YOUNGHWA TECH Co is expected to generate 0.5 times more return on investment than CBI. However, YOUNGHWA TECH Co is 1.99 times less risky than CBI. It trades about -0.04 of its potential returns per unit of risk. CBI Co is currently generating about -0.07 per unit of risk. If you would invest 1,106,602 in YOUNGHWA TECH Co on August 31, 2024 and sell it today you would lose (359,602) from holding YOUNGHWA TECH Co or give up 32.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.35% |
| Values | Daily Returns |
YOUNGHWA TECH Co vs. CBI Co
Performance |
| Timeline |
| YOUNGHWA TECH |
| CBI Co |
YOUNGHWA TECH and CBI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YOUNGHWA TECH and CBI
The main advantage of trading using opposite YOUNGHWA TECH and CBI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YOUNGHWA TECH position performs unexpectedly, CBI 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 CBI will offset losses from the drop in CBI's long position.| YOUNGHWA TECH vs. Lindeman Asia Investment | YOUNGHWA TECH vs. SS TECH | YOUNGHWA TECH vs. Sungchang Autotech Co | YOUNGHWA TECH vs. DB Financial Investment |
| CBI vs. Cheryong Industrial CoLtd | CBI vs. ECSTELECOM Co | CBI vs. Shinsegae Information Communication | CBI vs. Kumho Industrial 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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