Correlation Between Miwon Chemical and DukSan Neolux
Can any of the company-specific risk be diversified away by investing in both Miwon Chemical and DukSan Neolux 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 DukSan Neolux into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Miwon Chemical and DukSan Neolux CoLtd, you can compare the effects of market volatilities on Miwon Chemical and DukSan Neolux 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 DukSan Neolux. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miwon Chemical and DukSan Neolux.
Diversification Opportunities for Miwon Chemical and DukSan Neolux
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Miwon and DukSan is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Miwon Chemical and DukSan Neolux CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DukSan Neolux CoLtd 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 DukSan Neolux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DukSan Neolux CoLtd has no effect on the direction of Miwon Chemical i.e., Miwon Chemical and DukSan Neolux go up and down completely randomly.
Pair Corralation between Miwon Chemical and DukSan Neolux
Assuming the 90 days trading horizon Miwon Chemical is expected to generate 7.77 times less return on investment than DukSan Neolux. But when comparing it to its historical volatility, Miwon Chemical is 3.37 times less risky than DukSan Neolux. It trades about 0.06 of its potential returns per unit of risk. DukSan Neolux CoLtd is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,415,000 in DukSan Neolux CoLtd on September 13, 2024 and sell it today you would earn a total of 285,000 from holding DukSan Neolux CoLtd or generate 11.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Miwon Chemical vs. DukSan Neolux CoLtd
Performance |
| Timeline |
| Miwon Chemical |
| DukSan Neolux CoLtd |
Miwon Chemical and DukSan Neolux Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Miwon Chemical and DukSan Neolux
The main advantage of trading using opposite Miwon Chemical and DukSan Neolux positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miwon Chemical position performs unexpectedly, DukSan Neolux 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 DukSan Neolux will offset losses from the drop in DukSan Neolux's long position.| Miwon Chemical vs. A Tech Solution Co | Miwon Chemical vs. RFTech Co | Miwon Chemical vs. PNC Technologies co | Miwon Chemical vs. CU Tech Corp |
| DukSan Neolux vs. Samyang Foods Co | DukSan Neolux vs. Dongwon Metal Co | DukSan Neolux vs. FoodNamoo | DukSan Neolux vs. CJ Seafood Corp |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |