Correlation Between Youngsin Metal and Namhwa Industrial
Can any of the company-specific risk be diversified away by investing in both Youngsin Metal and Namhwa Industrial 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 Youngsin Metal and Namhwa Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Youngsin Metal Industrial and Namhwa Industrial Co, you can compare the effects of market volatilities on Youngsin Metal and Namhwa Industrial 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 Youngsin Metal with a short position of Namhwa Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngsin Metal and Namhwa Industrial.
Diversification Opportunities for Youngsin Metal and Namhwa Industrial
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Youngsin and Namhwa is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Youngsin Metal Industrial and Namhwa Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namhwa Industrial and Youngsin Metal 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 Youngsin Metal Industrial are associated (or correlated) with Namhwa Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Namhwa Industrial has no effect on the direction of Youngsin Metal i.e., Youngsin Metal and Namhwa Industrial go up and down completely randomly.
Pair Corralation between Youngsin Metal and Namhwa Industrial
Assuming the 90 days trading horizon Youngsin Metal Industrial is expected to under-perform the Namhwa Industrial. In addition to that, Youngsin Metal is 1.81 times more volatile than Namhwa Industrial Co. It trades about -0.04 of its total potential returns per unit of risk. Namhwa Industrial Co is currently generating about 0.05 per unit of volatility. If you would invest 505,000 in Namhwa Industrial Co on September 25, 2024 and sell it today you would earn a total of 38,000 from holding Namhwa Industrial Co or generate 7.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Youngsin Metal Industrial vs. Namhwa Industrial Co
Performance |
Timeline |
Youngsin Metal Industrial |
Namhwa Industrial |
Youngsin Metal and Namhwa Industrial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Youngsin Metal and Namhwa Industrial
The main advantage of trading using opposite Youngsin Metal and Namhwa Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngsin Metal position performs unexpectedly, Namhwa Industrial 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 Namhwa Industrial will offset losses from the drop in Namhwa Industrial's long position.Youngsin Metal vs. Busan Industrial Co | Youngsin Metal vs. Busan Ind | Youngsin Metal vs. Mirae Asset Daewoo | Youngsin Metal vs. Shinhan WTI Futures |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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