Correlation Between Youngchang Chemical and EBEST Investment
Can any of the company-specific risk be diversified away by investing in both Youngchang Chemical and EBEST Investment 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 EBEST Investment 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 EBEST Investment Securities, you can compare the effects of market volatilities on Youngchang Chemical and EBEST Investment 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 EBEST Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youngchang Chemical and EBEST Investment.
Diversification Opportunities for Youngchang Chemical and EBEST Investment
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Youngchang and EBEST is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Youngchang Chemical Co and EBEST Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBEST Investment Sec 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 EBEST Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EBEST Investment Sec has no effect on the direction of Youngchang Chemical i.e., Youngchang Chemical and EBEST Investment go up and down completely randomly.
Pair Corralation between Youngchang Chemical and EBEST Investment
Assuming the 90 days trading horizon Youngchang Chemical Co is expected to under-perform the EBEST Investment. In addition to that, Youngchang Chemical is 2.42 times more volatile than EBEST Investment Securities. It trades about -0.09 of its total potential returns per unit of risk. EBEST Investment Securities is currently generating about -0.17 per unit of volatility. If you would invest 442,000 in EBEST Investment Securities on October 8, 2024 and sell it today you would lose (67,000) from holding EBEST Investment Securities or give up 15.16% 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. EBEST Investment Securities
Performance |
Timeline |
Youngchang Chemical |
EBEST Investment Sec |
Youngchang Chemical and EBEST Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Youngchang Chemical and EBEST Investment
The main advantage of trading using opposite Youngchang Chemical and EBEST Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youngchang Chemical position performs unexpectedly, EBEST Investment 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 EBEST Investment will offset losses from the drop in EBEST Investment's long position.Youngchang Chemical vs. LG Chem | Youngchang Chemical vs. Chunbo Co | Youngchang Chemical vs. DukSan Neolux CoLtd | Youngchang Chemical vs. Hyosung Chemical Corp |
EBEST Investment vs. Hotel Shilla Co | EBEST Investment vs. Top Material Co | EBEST Investment vs. LG Household Healthcare | EBEST Investment vs. Taegu Broadcasting |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |