Correlation Between Miwon Chemical and Sung Bo
Can any of the company-specific risk be diversified away by investing in both Miwon Chemical and Sung Bo 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 Miwon Chemical and Sung Bo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Miwon Chemical and Sung Bo Chemicals, you can compare the effects of market volatilities on Miwon Chemical and Sung Bo 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 Miwon Chemical with a short position of Sung Bo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miwon Chemical and Sung Bo.
Diversification Opportunities for Miwon Chemical and Sung Bo
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Miwon and Sung is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Miwon Chemical and Sung Bo Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sung Bo Chemicals and Miwon Chemical 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 Miwon Chemical are associated (or correlated) with Sung Bo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sung Bo Chemicals has no effect on the direction of Miwon Chemical i.e., Miwon Chemical and Sung Bo go up and down completely randomly.
Pair Corralation between Miwon Chemical and Sung Bo
Assuming the 90 days trading horizon Miwon Chemical is expected to under-perform the Sung Bo. In addition to that, Miwon Chemical is 1.28 times more volatile than Sung Bo Chemicals. It trades about -0.23 of its total potential returns per unit of risk. Sung Bo Chemicals is currently generating about -0.27 per unit of volatility. If you would invest 262,500 in Sung Bo Chemicals on August 25, 2024 and sell it today you would lose (9,000) from holding Sung Bo Chemicals or give up 3.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Miwon Chemical vs. Sung Bo Chemicals
Performance |
| Timeline |
| Miwon Chemical |
| Sung Bo Chemicals |
Miwon Chemical and Sung Bo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Miwon Chemical and Sung Bo
The main advantage of trading using opposite Miwon Chemical and Sung Bo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miwon Chemical position performs unexpectedly, Sung Bo 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 Sung Bo will offset losses from the drop in Sung Bo's long position.| Miwon Chemical vs. LG Chem | Miwon Chemical vs. Chunbo Co | Miwon Chemical vs. Hyosung Chemical Corp | Miwon Chemical vs. LIG ES SPAC |
| Sung Bo vs. AptaBio Therapeutics | Sung Bo vs. Daewoo SBI SPAC | Sung Bo vs. Dream Security co | Sung Bo 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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