Correlation Between Myoung Shin and DIGITAL CHOSUN
Can any of the company-specific risk be diversified away by investing in both Myoung Shin and DIGITAL CHOSUN 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 DIGITAL CHOSUN 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 DIGITAL CHOSUN, you can compare the effects of market volatilities on Myoung Shin and DIGITAL CHOSUN 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 DIGITAL CHOSUN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Myoung Shin and DIGITAL CHOSUN.
Diversification Opportunities for Myoung Shin and DIGITAL CHOSUN
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Myoung and DIGITAL is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Myoung Shin Industrial and DIGITAL CHOSUN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIGITAL CHOSUN 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 DIGITAL CHOSUN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIGITAL CHOSUN has no effect on the direction of Myoung Shin i.e., Myoung Shin and DIGITAL CHOSUN go up and down completely randomly.
Pair Corralation between Myoung Shin and DIGITAL CHOSUN
Assuming the 90 days trading horizon Myoung Shin Industrial is expected to under-perform the DIGITAL CHOSUN. In addition to that, Myoung Shin is 1.06 times more volatile than DIGITAL CHOSUN. It trades about -0.18 of its total potential returns per unit of risk. DIGITAL CHOSUN is currently generating about 0.01 per unit of volatility. If you would invest 171,800 in DIGITAL CHOSUN on September 27, 2024 and sell it today you would lose (400.00) from holding DIGITAL CHOSUN or give up 0.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Myoung Shin Industrial vs. DIGITAL CHOSUN
Performance |
| Timeline |
| Myoung Shin Industrial |
| DIGITAL CHOSUN |
Myoung Shin and DIGITAL CHOSUN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Myoung Shin and DIGITAL CHOSUN
The main advantage of trading using opposite Myoung Shin and DIGITAL CHOSUN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Myoung Shin position performs unexpectedly, DIGITAL CHOSUN 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 DIGITAL CHOSUN will offset losses from the drop in DIGITAL CHOSUN's long position.| Myoung Shin vs. Gyeongnam Steel Co | Myoung Shin vs. YG Entertainment | Myoung Shin vs. SM Entertainment Co | Myoung Shin vs. Organic Tea Cosmetics |
| DIGITAL CHOSUN vs. Homecast CoLtd | DIGITAL CHOSUN vs. CJ Seafood Corp | DIGITAL CHOSUN vs. Hyundai Home Shopping | DIGITAL CHOSUN vs. Myoung Shin Industrial |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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