Correlation Between Youngchang Chemical and SK Holdings
Can any of the company-specific risk be diversified away by investing in both Youngchang Chemical and SK Holdings 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 Youngchang Chemical and SK Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Youngchang Chemical Co and SK Holdings Co, you can compare the effects of market volatilities on Youngchang Chemical and SK Holdings 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 Youngchang Chemical with a short position of SK Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngchang Chemical and SK Holdings.
Diversification Opportunities for Youngchang Chemical and SK Holdings
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Youngchang and 034730 is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Youngchang Chemical Co and SK Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Holdings and Youngchang Chemical 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 Youngchang Chemical Co are associated (or correlated) with SK Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Holdings has no effect on the direction of Youngchang Chemical i.e., Youngchang Chemical and SK Holdings go up and down completely randomly.
Pair Corralation between Youngchang Chemical and SK Holdings
Assuming the 90 days trading horizon Youngchang Chemical Co is expected to generate 2.01 times more return on investment than SK Holdings. However, Youngchang Chemical is 2.01 times more volatile than SK Holdings Co. It trades about -0.03 of its potential returns per unit of risk. SK Holdings Co is currently generating about -0.17 per unit of risk. If you would invest 1,400,000 in Youngchang Chemical Co on September 24, 2024 and sell it today you would lose (66,000) from holding Youngchang Chemical Co or give up 4.71% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Youngchang Chemical Co vs. SK Holdings Co
Performance |
Timeline |
Youngchang Chemical |
SK Holdings |
Youngchang Chemical and SK Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Youngchang Chemical and SK Holdings
The main advantage of trading using opposite Youngchang Chemical and SK Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngchang Chemical position performs unexpectedly, SK Holdings 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 SK Holdings will offset losses from the drop in SK Holdings' long position.Youngchang Chemical vs. Samick Musical Instruments | Youngchang Chemical vs. Sungmoon Electronics Co | Youngchang Chemical vs. ITM Semiconductor Co | Youngchang Chemical vs. Sejong Telecom |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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