Correlation Between Miwon Chemical and Daehan Synthetic
Can any of the company-specific risk be diversified away by investing in both Miwon Chemical and Daehan Synthetic 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 Daehan Synthetic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Miwon Chemical and Daehan Synthetic Fiber, you can compare the effects of market volatilities on Miwon Chemical and Daehan Synthetic 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 Daehan Synthetic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miwon Chemical and Daehan Synthetic.
Diversification Opportunities for Miwon Chemical and Daehan Synthetic
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Miwon and Daehan is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Miwon Chemical and Daehan Synthetic Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daehan Synthetic Fiber 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 Daehan Synthetic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daehan Synthetic Fiber has no effect on the direction of Miwon Chemical i.e., Miwon Chemical and Daehan Synthetic go up and down completely randomly.
Pair Corralation between Miwon Chemical and Daehan Synthetic
Assuming the 90 days trading horizon Miwon Chemical is expected to generate 1.38 times more return on investment than Daehan Synthetic. However, Miwon Chemical is 1.38 times more volatile than Daehan Synthetic Fiber. It trades about -0.06 of its potential returns per unit of risk. Daehan Synthetic Fiber is currently generating about -0.11 per unit of risk. If you would invest 7,960,000 in Miwon Chemical on September 2, 2024 and sell it today you would lose (110,000) from holding Miwon Chemical or give up 1.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Miwon Chemical vs. Daehan Synthetic Fiber
Performance |
| Timeline |
| Miwon Chemical |
| Daehan Synthetic Fiber |
Miwon Chemical and Daehan Synthetic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Miwon Chemical and Daehan Synthetic
The main advantage of trading using opposite Miwon Chemical and Daehan Synthetic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miwon Chemical position performs unexpectedly, Daehan Synthetic 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 Daehan Synthetic will offset losses from the drop in Daehan Synthetic's long position.| Miwon Chemical vs. Kukdo Chemical Co | Miwon Chemical vs. Youl Chon Chemical | Miwon Chemical vs. Kyung In Synthetic Corp | Miwon Chemical vs. Daeduck Electronics Co |
| Daehan Synthetic vs. Shinsung Delta Tech | Daehan Synthetic vs. A Tech Solution Co | Daehan Synthetic vs. CU Medical Systems | Daehan Synthetic vs. Green Cross Medical |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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