Correlation Between Miwon Chemical and Shin Steel
Can any of the company-specific risk be diversified away by investing in both Miwon Chemical and Shin Steel 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 Shin Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Miwon Chemical and Shin Steel Co, you can compare the effects of market volatilities on Miwon Chemical and Shin Steel 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 Shin Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miwon Chemical and Shin Steel.
Diversification Opportunities for Miwon Chemical and Shin Steel
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Miwon and Shin is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Miwon Chemical and Shin Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Steel 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 Shin Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Steel has no effect on the direction of Miwon Chemical i.e., Miwon Chemical and Shin Steel go up and down completely randomly.
Pair Corralation between Miwon Chemical and Shin Steel
Assuming the 90 days trading horizon Miwon Chemical is expected to generate 0.23 times more return on investment than Shin Steel. However, Miwon Chemical is 4.41 times less risky than Shin Steel. It trades about 0.09 of its potential returns per unit of risk. Shin Steel Co is currently generating about 0.01 per unit of risk. If you would invest 6,639,878 in Miwon Chemical on August 31, 2024 and sell it today you would earn a total of 1,320,122 from holding Miwon Chemical or generate 19.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Miwon Chemical vs. Shin Steel Co
Performance |
| Timeline |
| Miwon Chemical |
| Shin Steel |
Miwon Chemical and Shin Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Miwon Chemical and Shin Steel
The main advantage of trading using opposite Miwon Chemical and Shin Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miwon Chemical position performs unexpectedly, Shin Steel 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 Shin Steel will offset losses from the drop in Shin Steel'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 |
| Shin Steel vs. Miwon Chemical | Shin Steel vs. DONGKUK TED METAL | Shin Steel vs. Haitai Confectionery Foods | Shin Steel vs. Kukdo Chemical 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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