Correlation Between Youngsin Metal and Jb Financial

Can any of the company-specific risk be diversified away by investing in both Youngsin Metal and Jb Financial 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 Jb Financial 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 Jb Financial, you can compare the effects of market volatilities on Youngsin Metal and Jb Financial 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 Jb Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngsin Metal and Jb Financial.

Diversification Opportunities for Youngsin Metal and Jb Financial

-0.51

Correlation Coefficient

Youngsin Metal  Jb Financial

Excellent diversification

The 3 months correlation between Youngsin and 175330 is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Youngsin Metal Industrial and Jb Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jb Financial 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 Jb Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jb Financial has no effect on the direction of Youngsin Metal i.e., Youngsin Metal and Jb Financial go up and down completely randomly.

Pair Corralation between Youngsin Metal and Jb Financial

Assuming the 90 days trading horizon Youngsin Metal Industrial is expected to under-perform the Jb Financial. In addition to that, Youngsin Metal is 1.28 times more volatile than Jb Financial. It trades about -0.03 of its total potential returns per unit of risk. Jb Financial is currently generating about 0.11 per unit of volatility. If you would invest  1,597,689  in Jb Financial on December 26, 2024 and sell it today you would earn a total of  184,311  from holding Jb Financial or generate 11.54% 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.  Jb Financial

Youngsin Metal Industrial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Youngsin Metal Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Youngsin Metal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jb Financial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jb Financial are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jb Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Youngsin Metal and Jb Financial

The main advantage of trading using opposite Youngsin Metal and Jb Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngsin Metal position performs unexpectedly, Jb Financial 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 Jb Financial will offset losses from the drop in Jb Financial's long position.

The idea behind Youngsin Metal Industrial and Jb Financial 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.