Correlation Between Songwon Industrial and Myoung Shin
Can any of the company-specific risk be diversified away by investing in both Songwon Industrial and Myoung Shin 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 Songwon Industrial and Myoung Shin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Songwon Industrial Co and Myoung Shin Industrial, you can compare the effects of market volatilities on Songwon Industrial and Myoung Shin 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 Songwon Industrial with a short position of Myoung Shin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Songwon Industrial and Myoung Shin.
Diversification Opportunities for Songwon Industrial and Myoung Shin
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Songwon and Myoung is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Songwon Industrial Co and Myoung Shin Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Myoung Shin Industrial and Songwon Industrial 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 Songwon Industrial Co are associated (or correlated) with Myoung Shin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Myoung Shin Industrial has no effect on the direction of Songwon Industrial i.e., Songwon Industrial and Myoung Shin go up and down completely randomly.
Pair Corralation between Songwon Industrial and Myoung Shin
Assuming the 90 days trading horizon Songwon Industrial Co is expected to generate 1.32 times more return on investment than Myoung Shin. However, Songwon Industrial is 1.32 times more volatile than Myoung Shin Industrial. It trades about 0.24 of its potential returns per unit of risk. Myoung Shin Industrial is currently generating about 0.09 per unit of risk. If you would invest 1,121,000 in Songwon Industrial Co on October 24, 2024 and sell it today you would earn a total of 130,000 from holding Songwon Industrial Co or generate 11.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Songwon Industrial Co vs. Myoung Shin Industrial
Performance |
| Timeline |
| Songwon Industrial |
| Myoung Shin Industrial |
Songwon Industrial and Myoung Shin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Songwon Industrial and Myoung Shin
The main advantage of trading using opposite Songwon Industrial and Myoung Shin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Songwon Industrial position performs unexpectedly, Myoung Shin 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 Myoung Shin will offset losses from the drop in Myoung Shin's long position.| Songwon Industrial vs. AptaBio Therapeutics | Songwon Industrial vs. Daewoo SBI SPAC | Songwon Industrial vs. Dream Security co | Songwon Industrial vs. Microfriend |
| Myoung Shin vs. Kumho Petro Chemical | Myoung Shin vs. Iljin Display | Myoung Shin vs. Korea Petro Chemical | Myoung Shin vs. Kg Chemical |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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