Correlation Between Choil Aluminum and Miwon Chemicals
Can any of the company-specific risk be diversified away by investing in both Choil Aluminum and Miwon Chemicals 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 Choil Aluminum and Miwon Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Choil Aluminum and Miwon Chemicals Co, you can compare the effects of market volatilities on Choil Aluminum and Miwon Chemicals 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 Choil Aluminum with a short position of Miwon Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choil Aluminum and Miwon Chemicals.
Diversification Opportunities for Choil Aluminum and Miwon Chemicals
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Choil and Miwon is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Choil Aluminum and Miwon Chemicals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miwon Chemicals and Choil Aluminum 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 Choil Aluminum are associated (or correlated) with Miwon Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miwon Chemicals has no effect on the direction of Choil Aluminum i.e., Choil Aluminum and Miwon Chemicals go up and down completely randomly.
Pair Corralation between Choil Aluminum and Miwon Chemicals
Assuming the 90 days trading horizon Choil Aluminum is expected to under-perform the Miwon Chemicals. In addition to that, Choil Aluminum is 3.84 times more volatile than Miwon Chemicals Co. It trades about -0.16 of its total potential returns per unit of risk. Miwon Chemicals Co is currently generating about -0.13 per unit of volatility. If you would invest 7,990,000 in Miwon Chemicals Co on August 24, 2024 and sell it today you would lose (150,000) from holding Miwon Chemicals Co or give up 1.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choil Aluminum vs. Miwon Chemicals Co
Performance |
| Timeline |
| Choil Aluminum |
| Miwon Chemicals |
Choil Aluminum and Miwon Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choil Aluminum and Miwon Chemicals
The main advantage of trading using opposite Choil Aluminum and Miwon Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choil Aluminum position performs unexpectedly, Miwon Chemicals 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 Chemicals will offset losses from the drop in Miwon Chemicals' long position.| Choil Aluminum vs. Busan Industrial Co | Choil Aluminum vs. Busan Ind | Choil Aluminum vs. Mirae Asset Daewoo | Choil Aluminum vs. UNISEM Co |
| Miwon Chemicals vs. AptaBio Therapeutics | Miwon Chemicals vs. Daewoo SBI SPAC | Miwon Chemicals vs. Dream Security co | Miwon Chemicals 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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