Correlation Between Miwon Chemical and Shin Heung
Can any of the company-specific risk be diversified away by investing in both Miwon Chemical and Shin Heung 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 Heung 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 Heung Energy, you can compare the effects of market volatilities on Miwon Chemical and Shin Heung 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 Heung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miwon Chemical and Shin Heung.
Diversification Opportunities for Miwon Chemical and Shin Heung
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Miwon and Shin is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Miwon Chemical and Shin Heung Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Heung Energy 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 Heung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Heung Energy has no effect on the direction of Miwon Chemical i.e., Miwon Chemical and Shin Heung go up and down completely randomly.
Pair Corralation between Miwon Chemical and Shin Heung
Assuming the 90 days trading horizon Miwon Chemical is expected to generate 0.28 times more return on investment than Shin Heung. However, Miwon Chemical is 3.62 times less risky than Shin Heung. It trades about -0.1 of its potential returns per unit of risk. Shin Heung Energy is currently generating about -0.43 per unit of risk. If you would invest 7,920,000 in Miwon Chemical on August 25, 2024 and sell it today you would lose (220,000) from holding Miwon Chemical or give up 2.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Miwon Chemical vs. Shin Heung Energy
Performance |
| Timeline |
| Miwon Chemical |
| Shin Heung Energy |
Miwon Chemical and Shin Heung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Miwon Chemical and Shin Heung
The main advantage of trading using opposite Miwon Chemical and Shin Heung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miwon Chemical position performs unexpectedly, Shin Heung 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 Heung will offset losses from the drop in Shin Heung's long position.| Miwon Chemical vs. SBI Investment KOREA | Miwon Chemical vs. Golden Bridge Investment | Miwon Chemical vs. SK Telecom Co | Miwon Chemical vs. KT Submarine Telecom |
| Shin Heung vs. Youngchang Chemical Co | Shin Heung vs. Miwon Chemical | Shin Heung vs. Daehan Steel | Shin Heung vs. TK Chemical |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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