Correlation Between Pureun Mutual and Youngbo Chemical

Can any of the company-specific risk be diversified away by investing in both Pureun Mutual 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 Pureun Mutual and Youngbo Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pureun Mutual Savings and Youngbo Chemical Co, you can compare the effects of market volatilities on Pureun Mutual 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 Pureun Mutual with a short position of Youngbo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pureun Mutual and Youngbo Chemical.

Diversification Opportunities for Pureun Mutual and Youngbo Chemical

0.54

Correlation Coefficient

Pureun Mutual  Youngbo Chemical

Very weak diversification

The 3 months correlation between Pureun and Youngbo is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Pureun Mutual Savings and Youngbo Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngbo Chemical and Pureun Mutual 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 Pureun Mutual Savings 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 Pureun Mutual i.e., Pureun Mutual and Youngbo Chemical go up and down completely randomly.

Pair Corralation between Pureun Mutual and Youngbo Chemical

Assuming the 90 days trading horizon Pureun Mutual Savings is expected to generate 2.47 times more return on investment than Youngbo Chemical. However, Pureun Mutual is 2.47 times more volatile than Youngbo Chemical Co. It trades about 0.06 of its potential returns per unit of risk. Youngbo Chemical Co is currently generating about 0.1 per unit of risk. If you would invest  823,129  in Pureun Mutual Savings on September 29, 2024 and sell it today you would earn a total of  28,871  from holding Pureun Mutual Savings or generate 3.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Pureun Mutual Savings  vs.  Youngbo Chemical Co

Pureun Mutual Savings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pureun Mutual Savings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Pureun Mutual is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Youngbo Chemical

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Youngbo Chemical Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Youngbo Chemical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pureun Mutual and Youngbo Chemical

The main advantage of trading using opposite Pureun Mutual and Youngbo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pureun Mutual 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.

The idea behind Pureun Mutual Savings and Youngbo Chemical Co 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.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.