Correlation Between Miwon Chemical and INNOX Advanced
Can any of the company-specific risk be diversified away by investing in both Miwon Chemical and INNOX Advanced 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 INNOX Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Miwon Chemical and INNOX Advanced Materials, you can compare the effects of market volatilities on Miwon Chemical and INNOX Advanced 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 INNOX Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miwon Chemical and INNOX Advanced.
Diversification Opportunities for Miwon Chemical and INNOX Advanced
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Miwon and INNOX is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Miwon Chemical and INNOX Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INNOX Advanced Materials 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 INNOX Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INNOX Advanced Materials has no effect on the direction of Miwon Chemical i.e., Miwon Chemical and INNOX Advanced go up and down completely randomly.
Pair Corralation between Miwon Chemical and INNOX Advanced
Assuming the 90 days trading horizon Miwon Chemical is expected to generate 0.33 times more return on investment than INNOX Advanced. However, Miwon Chemical is 3.06 times less risky than INNOX Advanced. It trades about -0.14 of its potential returns per unit of risk. INNOX Advanced Materials is currently generating about -0.06 per unit of risk. If you would invest 7,990,000 in Miwon Chemical on August 29, 2024 and sell it today you would lose (210,000) from holding Miwon Chemical or give up 2.63% 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. INNOX Advanced Materials
Performance |
| Timeline |
| Miwon Chemical |
| INNOX Advanced Materials |
Miwon Chemical and INNOX Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Miwon Chemical and INNOX Advanced
The main advantage of trading using opposite Miwon Chemical and INNOX Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miwon Chemical position performs unexpectedly, INNOX Advanced 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 INNOX Advanced will offset losses from the drop in INNOX Advanced's long position.| Miwon Chemical vs. Cheryong Industrial CoLtd | Miwon Chemical vs. InfoBank | Miwon Chemical vs. Total Soft Bank | Miwon Chemical vs. Seoyon Topmetal Co |
| INNOX Advanced vs. Clean Science co | INNOX Advanced vs. KIWI Media Group | INNOX Advanced vs. Barunson Entertainment Arts | INNOX Advanced vs. JYP Entertainment 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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