Correlation Between Miwon Chemical and Shinsegae
Can any of the company-specific risk be diversified away by investing in both Miwon Chemical and Shinsegae 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 Shinsegae into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Miwon Chemical and Shinsegae, you can compare the effects of market volatilities on Miwon Chemical and Shinsegae 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 Shinsegae. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miwon Chemical and Shinsegae.
Diversification Opportunities for Miwon Chemical and Shinsegae
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Miwon and Shinsegae is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Miwon Chemical and Shinsegae in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae 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 Shinsegae. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae has no effect on the direction of Miwon Chemical i.e., Miwon Chemical and Shinsegae go up and down completely randomly.
Pair Corralation between Miwon Chemical and Shinsegae
Assuming the 90 days trading horizon Miwon Chemical is expected to under-perform the Shinsegae. But the stock apears to be less risky and, when comparing its historical volatility, Miwon Chemical is 1.26 times less risky than Shinsegae. The stock trades about -0.07 of its potential returns per unit of risk. The Shinsegae is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 13,000,000 in Shinsegae on November 3, 2024 and sell it today you would earn a total of 270,000 from holding Shinsegae or generate 2.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Miwon Chemical vs. Shinsegae
Performance |
| Timeline |
| Miwon Chemical |
| Shinsegae |
Miwon Chemical and Shinsegae Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Miwon Chemical and Shinsegae
The main advantage of trading using opposite Miwon Chemical and Shinsegae positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miwon Chemical position performs unexpectedly, Shinsegae 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 Shinsegae will offset losses from the drop in Shinsegae's long position.| Miwon Chemical vs. Youngchang Chemical Co | Miwon Chemical vs. Hanwha Chemical Corp | Miwon Chemical vs. Kukdong Oil Chemicals | Miwon Chemical vs. Narae Nanotech Corp |
| Shinsegae vs. Seoul Food Industrial | Shinsegae vs. Seohee Construction Co | Shinsegae vs. Seoam Machinery Industry | Shinsegae vs. CKH Food Health |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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