Correlation Between Shinsegae and Miwon Chemical
Can any of the company-specific risk be diversified away by investing in both Shinsegae 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 Shinsegae and Miwon Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinsegae and Miwon Chemical, you can compare the effects of market volatilities on Shinsegae 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 Shinsegae with a short position of Miwon Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae and Miwon Chemical.
Diversification Opportunities for Shinsegae and Miwon Chemical
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinsegae and Miwon is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae and Miwon Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miwon Chemical and Shinsegae 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 Shinsegae 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 Shinsegae i.e., Shinsegae and Miwon Chemical go up and down completely randomly.
Pair Corralation between Shinsegae and Miwon Chemical
Assuming the 90 days trading horizon Shinsegae is expected to under-perform the Miwon Chemical. In addition to that, Shinsegae is 1.74 times more volatile than Miwon Chemical. It trades about -0.06 of its total potential returns per unit of risk. Miwon Chemical is currently generating about 0.06 per unit of volatility. If you would invest 6,079,499 in Miwon Chemical on October 23, 2024 and sell it today you would earn a total of 1,720,501 from holding Miwon Chemical or generate 28.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Shinsegae vs. Miwon Chemical
Performance |
| Timeline |
| Shinsegae |
| Miwon Chemical |
Shinsegae and Miwon Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae and Miwon Chemical
The main advantage of trading using opposite Shinsegae and Miwon Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae 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.| Shinsegae vs. Miwon Chemical | Shinsegae vs. NewFlex Technology Co | Shinsegae vs. TK Chemical | Shinsegae vs. Sung Bo Chemicals |
| Miwon Chemical vs. KTB Investment Securities | Miwon Chemical vs. SBI Investment KOREA | Miwon Chemical vs. Sangsangin Investment Securities | Miwon Chemical vs. DSC Investment |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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