Correlation Between Youngbo Chemical and Kyeryong Construction
Can any of the company-specific risk be diversified away by investing in both Youngbo Chemical and Kyeryong Construction 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 Youngbo Chemical and Kyeryong Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Youngbo Chemical Co and Kyeryong Construction Industrial, you can compare the effects of market volatilities on Youngbo Chemical and Kyeryong Construction 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 Youngbo Chemical with a short position of Kyeryong Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngbo Chemical and Kyeryong Construction.
Diversification Opportunities for Youngbo Chemical and Kyeryong Construction
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Youngbo and Kyeryong is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Youngbo Chemical Co and Kyeryong Construction Industri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyeryong Construction and Youngbo 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 Youngbo Chemical Co are associated (or correlated) with Kyeryong Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyeryong Construction has no effect on the direction of Youngbo Chemical i.e., Youngbo Chemical and Kyeryong Construction go up and down completely randomly.
Pair Corralation between Youngbo Chemical and Kyeryong Construction
Assuming the 90 days trading horizon Youngbo Chemical Co is expected to generate 0.96 times more return on investment than Kyeryong Construction. However, Youngbo Chemical Co is 1.04 times less risky than Kyeryong Construction. It trades about 0.3 of its potential returns per unit of risk. Kyeryong Construction Industrial is currently generating about -0.38 per unit of risk. If you would invest 355,958 in Youngbo Chemical Co on October 22, 2024 and sell it today you would earn a total of 18,042 from holding Youngbo Chemical Co or generate 5.07% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Youngbo Chemical Co vs. Kyeryong Construction Industri
Performance |
Timeline |
Youngbo Chemical |
Kyeryong Construction |
Youngbo Chemical and Kyeryong Construction Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Youngbo Chemical and Kyeryong Construction
The main advantage of trading using opposite Youngbo Chemical and Kyeryong Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngbo Chemical position performs unexpectedly, Kyeryong Construction 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 Kyeryong Construction will offset losses from the drop in Kyeryong Construction's long position.Youngbo Chemical vs. Tuksu Engineering ConstructionLtd | Youngbo Chemical vs. Keyang Electric Machinery | Youngbo Chemical vs. Dongwoo Farm To | Youngbo Chemical vs. Camus Engineering Construction |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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