Correlation Between Myoung Shin and Samhwa Paint
Can any of the company-specific risk be diversified away by investing in both Myoung Shin and Samhwa Paint 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 Myoung Shin and Samhwa Paint into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Myoung Shin Industrial and Samhwa Paint Industrial, you can compare the effects of market volatilities on Myoung Shin and Samhwa Paint 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 Myoung Shin with a short position of Samhwa Paint. Check out your portfolio center. Please also check ongoing floating volatility patterns of Myoung Shin and Samhwa Paint.
Diversification Opportunities for Myoung Shin and Samhwa Paint
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Myoung and Samhwa is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Myoung Shin Industrial and Samhwa Paint Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhwa Paint Industrial and Myoung Shin 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 Myoung Shin Industrial are associated (or correlated) with Samhwa Paint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhwa Paint Industrial has no effect on the direction of Myoung Shin i.e., Myoung Shin and Samhwa Paint go up and down completely randomly.
Pair Corralation between Myoung Shin and Samhwa Paint
Assuming the 90 days trading horizon Myoung Shin Industrial is expected to generate 1.97 times more return on investment than Samhwa Paint. However, Myoung Shin is 1.97 times more volatile than Samhwa Paint Industrial. It trades about -0.08 of its potential returns per unit of risk. Samhwa Paint Industrial is currently generating about -0.2 per unit of risk. If you would invest 1,334,000 in Myoung Shin Industrial on August 29, 2024 and sell it today you would lose (115,000) from holding Myoung Shin Industrial or give up 8.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Myoung Shin Industrial vs. Samhwa Paint Industrial
Performance |
| Timeline |
| Myoung Shin Industrial |
| Samhwa Paint Industrial |
Myoung Shin and Samhwa Paint Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Myoung Shin and Samhwa Paint
The main advantage of trading using opposite Myoung Shin and Samhwa Paint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Myoung Shin position performs unexpectedly, Samhwa Paint 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 Samhwa Paint will offset losses from the drop in Samhwa Paint's long position.| Myoung Shin vs. Sungwoo Electronics Co | Myoung Shin vs. Samwha Electronics Co | Myoung Shin vs. Namhwa Industrial Co | Myoung Shin vs. Kbi Metal Co |
| Samhwa Paint vs. AptaBio Therapeutics | Samhwa Paint vs. Daewoo SBI SPAC | Samhwa Paint vs. Dream Security co | Samhwa Paint vs. Microfriend |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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