Correlation Between Jeju Semiconductor and Miwon Chemical
Can any of the company-specific risk be diversified away by investing in both Jeju Semiconductor 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 Jeju Semiconductor and Miwon Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeju Semiconductor Corp and Miwon Chemical, you can compare the effects of market volatilities on Jeju Semiconductor 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 Jeju Semiconductor with a short position of Miwon Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Semiconductor and Miwon Chemical.
Diversification Opportunities for Jeju Semiconductor and Miwon Chemical
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jeju and Miwon is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Semiconductor Corp and Miwon Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miwon Chemical and Jeju Semiconductor 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 Jeju Semiconductor Corp 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 Jeju Semiconductor i.e., Jeju Semiconductor and Miwon Chemical go up and down completely randomly.
Pair Corralation between Jeju Semiconductor and Miwon Chemical
Assuming the 90 days trading horizon Jeju Semiconductor Corp is expected to under-perform the Miwon Chemical. In addition to that, Jeju Semiconductor is 2.75 times more volatile than Miwon Chemical. It trades about -0.55 of its total potential returns per unit of risk. Miwon Chemical is currently generating about -0.08 per unit of volatility. If you would invest 7,990,000 in Miwon Chemical on September 1, 2024 and sell it today you would lose (140,000) from holding Miwon Chemical or give up 1.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Semiconductor Corp vs. Miwon Chemical
Performance |
| Timeline |
| Jeju Semiconductor Corp |
| Miwon Chemical |
Jeju Semiconductor and Miwon Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Semiconductor and Miwon Chemical
The main advantage of trading using opposite Jeju Semiconductor and Miwon Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Semiconductor 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.| Jeju Semiconductor vs. Dongsin Engineering Construction | Jeju Semiconductor vs. Doosan Fuel Cell | Jeju Semiconductor vs. Daishin Balance 1 | Jeju Semiconductor vs. Total Soft Bank |
| Miwon Chemical vs. LG Chem | Miwon Chemical vs. Chunbo Co | Miwon Chemical vs. Hyosung Chemical Corp | Miwon Chemical vs. LIG ES SPAC |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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