Correlation Between YungShin Global and Golden Biotechnology
Can any of the company-specific risk be diversified away by investing in both YungShin Global and Golden Biotechnology 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 YungShin Global and Golden Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YungShin Global Holding and Golden Biotechnology, you can compare the effects of market volatilities on YungShin Global and Golden Biotechnology 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 YungShin Global with a short position of Golden Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of YungShin Global and Golden Biotechnology.
Diversification Opportunities for YungShin Global and Golden Biotechnology
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between YungShin and Golden is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding YungShin Global Holding and Golden Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Biotechnology and YungShin Global 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 YungShin Global Holding are associated (or correlated) with Golden Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Biotechnology has no effect on the direction of YungShin Global i.e., YungShin Global and Golden Biotechnology go up and down completely randomly.
Pair Corralation between YungShin Global and Golden Biotechnology
Assuming the 90 days trading horizon YungShin Global Holding is expected to generate 0.25 times more return on investment than Golden Biotechnology. However, YungShin Global Holding is 4.06 times less risky than Golden Biotechnology. It trades about -0.39 of its potential returns per unit of risk. Golden Biotechnology is currently generating about -0.29 per unit of risk. If you would invest 5,410 in YungShin Global Holding on November 7, 2024 and sell it today you would lose (140.00) from holding YungShin Global Holding or give up 2.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.5% |
| Values | Daily Returns |
YungShin Global Holding vs. Golden Biotechnology
Performance |
| Timeline |
| YungShin Global Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Golden Biotechnology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
YungShin Global and Golden Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YungShin Global and Golden Biotechnology
The main advantage of trading using opposite YungShin Global and Golden Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YungShin Global position performs unexpectedly, Golden Biotechnology 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 Golden Biotechnology will offset losses from the drop in Golden Biotechnology's long position.The idea behind YungShin Global Holding and Golden Biotechnology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Global Correlations module to find global opportunities by holding instruments from different markets.
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