Correlation Between FoodNamoo and Youngbo Chemical
Can any of the company-specific risk be diversified away by investing in both FoodNamoo 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 FoodNamoo and Youngbo Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FoodNamoo and Youngbo Chemical Co, you can compare the effects of market volatilities on FoodNamoo 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 FoodNamoo with a short position of Youngbo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of FoodNamoo and Youngbo Chemical.
Diversification Opportunities for FoodNamoo and Youngbo Chemical
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FoodNamoo and Youngbo is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding FoodNamoo and Youngbo Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngbo Chemical and FoodNamoo 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 FoodNamoo 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 FoodNamoo i.e., FoodNamoo and Youngbo Chemical go up and down completely randomly.
Pair Corralation between FoodNamoo and Youngbo Chemical
Assuming the 90 days trading horizon FoodNamoo is expected to under-perform the Youngbo Chemical. But the stock apears to be less risky and, when comparing its historical volatility, FoodNamoo is 1.01 times less risky than Youngbo Chemical. The stock trades about -0.33 of its potential returns per unit of risk. The Youngbo Chemical Co is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 370,000 in Youngbo Chemical Co on November 5, 2024 and sell it today you would earn a total of 38,500 from holding Youngbo Chemical Co or generate 10.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FoodNamoo vs. Youngbo Chemical Co
Performance |
| Timeline |
| FoodNamoo |
| Youngbo Chemical |
FoodNamoo and Youngbo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FoodNamoo and Youngbo Chemical
The main advantage of trading using opposite FoodNamoo and Youngbo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FoodNamoo 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.| FoodNamoo vs. Maeil Dairies Co | FoodNamoo vs. HYUNDAI FEED | FoodNamoo vs. Neo Cremar Co | FoodNamoo vs. Dongwoo Farm To |
| Youngbo Chemical vs. NH Investment Securities | Youngbo Chemical vs. KTB Investment Securities | Youngbo Chemical vs. Jeju Beer Co | Youngbo Chemical vs. Daol Investment Securities |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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