Correlation Between Youl Chon and DONGKUK COATED
Can any of the company-specific risk be diversified away by investing in both Youl Chon and DONGKUK COATED 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 Youl Chon and DONGKUK COATED into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Youl Chon Chemical and DONGKUK TED METAL, you can compare the effects of market volatilities on Youl Chon and DONGKUK COATED 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 Youl Chon with a short position of DONGKUK COATED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youl Chon and DONGKUK COATED.
Diversification Opportunities for Youl Chon and DONGKUK COATED
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Youl and DONGKUK is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Youl Chon Chemical and DONGKUK TED METAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DONGKUK TED METAL and Youl Chon 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 Youl Chon Chemical are associated (or correlated) with DONGKUK COATED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DONGKUK TED METAL has no effect on the direction of Youl Chon i.e., Youl Chon and DONGKUK COATED go up and down completely randomly.
Pair Corralation between Youl Chon and DONGKUK COATED
Assuming the 90 days trading horizon Youl Chon Chemical is expected to under-perform the DONGKUK COATED. In addition to that, Youl Chon is 2.0 times more volatile than DONGKUK TED METAL. It trades about -0.03 of its total potential returns per unit of risk. DONGKUK TED METAL is currently generating about -0.05 per unit of volatility. If you would invest 657,000 in DONGKUK TED METAL on September 24, 2024 and sell it today you would lose (47,000) from holding DONGKUK TED METAL or give up 7.15% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Youl Chon Chemical vs. DONGKUK TED METAL
Performance |
Timeline |
Youl Chon Chemical |
DONGKUK TED METAL |
Youl Chon and DONGKUK COATED Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Youl Chon and DONGKUK COATED
The main advantage of trading using opposite Youl Chon and DONGKUK COATED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youl Chon position performs unexpectedly, DONGKUK COATED 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 DONGKUK COATED will offset losses from the drop in DONGKUK COATED's long position.Youl Chon vs. AptaBio Therapeutics | Youl Chon vs. Wonbang Tech Co | Youl Chon vs. Busan Industrial Co | Youl Chon vs. Busan Ind |
DONGKUK COATED vs. SungMoon Electronics Co | DONGKUK COATED vs. Sangshin Electronics Co | DONGKUK COATED vs. DAEDUCK ELECTRONICS CoLtd | DONGKUK COATED vs. Youl Chon Chemical |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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