Correlation Between Dongil Metal and Miwon Chemicals
Can any of the company-specific risk be diversified away by investing in both Dongil Metal 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 Dongil Metal and Miwon Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongil Metal Co and Miwon Chemicals Co, you can compare the effects of market volatilities on Dongil Metal 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 Dongil Metal with a short position of Miwon Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongil Metal and Miwon Chemicals.
Diversification Opportunities for Dongil Metal and Miwon Chemicals
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dongil and Miwon is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Dongil Metal 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 Dongil Metal 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 Dongil Metal 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 Dongil Metal i.e., Dongil Metal and Miwon Chemicals go up and down completely randomly.
Pair Corralation between Dongil Metal and Miwon Chemicals
Assuming the 90 days trading horizon Dongil Metal Co is expected to generate 3.93 times more return on investment than Miwon Chemicals. However, Dongil Metal is 3.93 times more volatile than Miwon Chemicals Co. It trades about 0.06 of its potential returns per unit of risk. Miwon Chemicals Co is currently generating about -0.07 per unit of risk. If you would invest 814,000 in Dongil Metal Co on November 3, 2024 and sell it today you would earn a total of 21,000 from holding Dongil Metal Co or generate 2.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongil Metal Co vs. Miwon Chemicals Co
Performance |
| Timeline |
| Dongil Metal |
| Miwon Chemicals |
Dongil Metal and Miwon Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongil Metal and Miwon Chemicals
The main advantage of trading using opposite Dongil Metal and Miwon Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongil Metal 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.| Dongil Metal vs. Seoam Machinery Industry | Dongil Metal vs. KCC Engineering Construction | Dongil Metal vs. Hanshin Construction Co | Dongil Metal vs. KEPCO Engineering Construction |
| Miwon Chemicals vs. TJ media Co | Miwon Chemicals vs. SKONEC Entertainment Co | Miwon Chemicals vs. Samsung Life Insurance | Miwon Chemicals vs. Grand Korea Leisure |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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