Correlation Between SH Energy and Miwon Chemical
Can any of the company-specific risk be diversified away by investing in both SH Energy and Miwon 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 SH Energy and Miwon Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SH Energy Chemical and Miwon Chemical, you can compare the effects of market volatilities on SH Energy and Miwon 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 SH Energy with a short position of Miwon Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of SH Energy and Miwon Chemical.
Diversification Opportunities for SH Energy and Miwon Chemical
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 002360 and Miwon is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding SH Energy Chemical and Miwon Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miwon Chemical and SH Energy 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 SH Energy Chemical are associated (or correlated) with Miwon Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miwon Chemical has no effect on the direction of SH Energy i.e., SH Energy and Miwon Chemical go up and down completely randomly.
Pair Corralation between SH Energy and Miwon Chemical
Assuming the 90 days trading horizon SH Energy Chemical is expected to generate 3.81 times more return on investment than Miwon Chemical. However, SH Energy is 3.81 times more volatile than Miwon Chemical. It trades about 0.07 of its potential returns per unit of risk. Miwon Chemical is currently generating about -0.06 per unit of risk. If you would invest 50,700 in SH Energy Chemical on September 2, 2024 and sell it today you would earn a total of 2,000 from holding SH Energy Chemical or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SH Energy Chemical vs. Miwon Chemical
Performance |
| Timeline |
| SH Energy Chemical |
| Miwon Chemical |
SH Energy and Miwon Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SH Energy and Miwon Chemical
The main advantage of trading using opposite SH Energy and Miwon Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SH Energy position performs unexpectedly, Miwon 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 Miwon Chemical will offset losses from the drop in Miwon Chemical's long position.| SH Energy vs. AptaBio Therapeutics | SH Energy vs. Daewoo SBI SPAC | SH Energy vs. Dream Security co | SH Energy vs. Microfriend |
| Miwon Chemical vs. Kukdo Chemical Co | Miwon Chemical vs. Youl Chon Chemical | Miwon Chemical vs. Kyung In Synthetic Corp | Miwon Chemical vs. Daeduck Electronics Co |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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