Correlation Between Miwon Chemical and Haitai Confectionery
Can any of the company-specific risk be diversified away by investing in both Miwon Chemical and Haitai Confectionery 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 Haitai Confectionery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Miwon Chemical and Haitai Confectionery Foods, you can compare the effects of market volatilities on Miwon Chemical and Haitai Confectionery 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 Haitai Confectionery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miwon Chemical and Haitai Confectionery.
Diversification Opportunities for Miwon Chemical and Haitai Confectionery
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Miwon and Haitai is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Miwon Chemical and Haitai Confectionery Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haitai Confectionery 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 Haitai Confectionery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haitai Confectionery has no effect on the direction of Miwon Chemical i.e., Miwon Chemical and Haitai Confectionery go up and down completely randomly.
Pair Corralation between Miwon Chemical and Haitai Confectionery
Assuming the 90 days trading horizon Miwon Chemical is expected to under-perform the Haitai Confectionery. But the stock apears to be less risky and, when comparing its historical volatility, Miwon Chemical is 3.11 times less risky than Haitai Confectionery. The stock trades about -0.03 of its potential returns per unit of risk. The Haitai Confectionery Foods is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 645,000 in Haitai Confectionery Foods on January 20, 2025 and sell it today you would earn a total of 49,000 from holding Haitai Confectionery Foods or generate 7.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Miwon Chemical vs. Haitai Confectionery Foods
Performance |
| Timeline |
| Miwon Chemical |
| Haitai Confectionery |
Miwon Chemical and Haitai Confectionery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Miwon Chemical and Haitai Confectionery
The main advantage of trading using opposite Miwon Chemical and Haitai Confectionery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miwon Chemical position performs unexpectedly, Haitai Confectionery 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 Haitai Confectionery will offset losses from the drop in Haitai Confectionery's long position.| Miwon Chemical vs. LG Chem | Miwon Chemical vs. Chunbo Co | Miwon Chemical vs. DukSan Neolux CoLtd | Miwon Chemical vs. Hyosung Chemical Corp |
| Haitai Confectionery vs. UJU Electronics Co | Haitai Confectionery vs. Cuckoo Electronics Co | Haitai Confectionery vs. Korean Reinsurance Co | Haitai Confectionery vs. Dongbu Insurance 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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