Correlation Between Miwon Chemical and Kukil Metal
Can any of the company-specific risk be diversified away by investing in both Miwon Chemical and Kukil Metal 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 Kukil Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Miwon Chemical and Kukil Metal Co, you can compare the effects of market volatilities on Miwon Chemical and Kukil Metal 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 Kukil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miwon Chemical and Kukil Metal.
Diversification Opportunities for Miwon Chemical and Kukil Metal
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Miwon and Kukil is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Miwon Chemical and Kukil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukil Metal 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 Kukil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukil Metal has no effect on the direction of Miwon Chemical i.e., Miwon Chemical and Kukil Metal go up and down completely randomly.
Pair Corralation between Miwon Chemical and Kukil Metal
Assuming the 90 days trading horizon Miwon Chemical is expected to under-perform the Kukil Metal. But the stock apears to be less risky and, when comparing its historical volatility, Miwon Chemical is 1.52 times less risky than Kukil Metal. The stock trades about -0.07 of its potential returns per unit of risk. The Kukil Metal Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 174,800 in Kukil Metal Co on November 3, 2024 and sell it today you would earn a total of 2,500 from holding Kukil Metal Co or generate 1.43% 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. Kukil Metal Co
Performance |
| Timeline |
| Miwon Chemical |
| Kukil Metal |
Miwon Chemical and Kukil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Miwon Chemical and Kukil Metal
The main advantage of trading using opposite Miwon Chemical and Kukil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miwon Chemical position performs unexpectedly, Kukil Metal 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 Kukil Metal will offset losses from the drop in Kukil Metal'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 |
| Kukil Metal vs. Polaris Office Corp | Kukil Metal vs. Top Material Co | Kukil Metal vs. Union Materials Corp | Kukil Metal vs. BIT Computer Co |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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