Correlation Between Miwon Chemical and Incar Financial
Can any of the company-specific risk be diversified away by investing in both Miwon Chemical and Incar Financial 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 Incar Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Miwon Chemical and Incar Financial Service, you can compare the effects of market volatilities on Miwon Chemical and Incar Financial 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 Incar Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miwon Chemical and Incar Financial.
Diversification Opportunities for Miwon Chemical and Incar Financial
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Miwon and Incar is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Miwon Chemical and Incar Financial Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Incar Financial Service 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 Incar Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Incar Financial Service has no effect on the direction of Miwon Chemical i.e., Miwon Chemical and Incar Financial go up and down completely randomly.
Pair Corralation between Miwon Chemical and Incar Financial
Assuming the 90 days trading horizon Miwon Chemical is expected to under-perform the Incar Financial. But the stock apears to be less risky and, when comparing its historical volatility, Miwon Chemical is 3.38 times less risky than Incar Financial. The stock trades about -0.3 of its potential returns per unit of risk. The Incar Financial Service is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 574,000 in Incar Financial Service on November 6, 2024 and sell it today you would lose (1,000.00) from holding Incar Financial Service or give up 0.17% 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. Incar Financial Service
Performance |
| Timeline |
| Miwon Chemical |
| Incar Financial Service |
Miwon Chemical and Incar Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Miwon Chemical and Incar Financial
The main advantage of trading using opposite Miwon Chemical and Incar Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miwon Chemical position performs unexpectedly, Incar Financial 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 Incar Financial will offset losses from the drop in Incar Financial's long position.| Miwon Chemical vs. Playgram Co | Miwon Chemical vs. Daishin Information Communications | Miwon Chemical vs. Lotte Data Communication | Miwon Chemical vs. Nice Information Telecommunication |
| Incar Financial vs. Clean Science co | Incar Financial vs. Kukil Metal Co | Incar Financial vs. Nh Investment And | Incar Financial vs. Woori Technology Investment |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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