Correlation Between Tway Air and Miwon Chemicals
Can any of the company-specific risk be diversified away by investing in both Tway Air 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 Tway Air and Miwon Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tway Air Co and Miwon Chemicals Co, you can compare the effects of market volatilities on Tway Air 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 Tway Air with a short position of Miwon Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tway Air and Miwon Chemicals.
Diversification Opportunities for Tway Air and Miwon Chemicals
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tway and Miwon is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Tway Air Co and Miwon Chemicals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miwon Chemicals and Tway Air 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 Tway Air Co 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 Tway Air i.e., Tway Air and Miwon Chemicals go up and down completely randomly.
Pair Corralation between Tway Air and Miwon Chemicals
Assuming the 90 days trading horizon Tway Air Co is expected to generate 3.11 times more return on investment than Miwon Chemicals. However, Tway Air is 3.11 times more volatile than Miwon Chemicals Co. It trades about 0.04 of its potential returns per unit of risk. Miwon Chemicals Co is currently generating about 0.05 per unit of risk. If you would invest 198,500 in Tway Air Co on August 30, 2024 and sell it today you would earn a total of 101,500 from holding Tway Air Co or generate 51.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tway Air Co vs. Miwon Chemicals Co
Performance |
| Timeline |
| Tway Air |
| Miwon Chemicals |
Tway Air and Miwon Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tway Air and Miwon Chemicals
The main advantage of trading using opposite Tway Air and Miwon Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tway Air 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.| Tway Air vs. Samlip General Foods | Tway Air vs. Choil Aluminum | Tway Air vs. Korean Air Lines | Tway Air vs. Lotte Chilsung Beverage |
| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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