Correlation Between Miwon Chemical and SV Investment
Can any of the company-specific risk be diversified away by investing in both Miwon Chemical and SV Investment 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 SV Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Miwon Chemical and SV Investment, you can compare the effects of market volatilities on Miwon Chemical and SV Investment 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 SV Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miwon Chemical and SV Investment.
Diversification Opportunities for Miwon Chemical and SV Investment
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Miwon and 289080 is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Miwon Chemical and SV Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SV Investment 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 SV Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SV Investment has no effect on the direction of Miwon Chemical i.e., Miwon Chemical and SV Investment go up and down completely randomly.
Pair Corralation between Miwon Chemical and SV Investment
Assuming the 90 days trading horizon Miwon Chemical is expected to generate 0.59 times more return on investment than SV Investment. However, Miwon Chemical is 1.71 times less risky than SV Investment. It trades about -0.3 of its potential returns per unit of risk. SV Investment is currently generating about -0.3 per unit of risk. If you would invest 7,950,000 in Miwon Chemical on November 7, 2024 and sell it today you would lose (340,000) from holding Miwon Chemical or give up 4.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Miwon Chemical vs. SV Investment
Performance |
| Timeline |
| Miwon Chemical |
| SV Investment |
Miwon Chemical and SV Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Miwon Chemical and SV Investment
The main advantage of trading using opposite Miwon Chemical and SV Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miwon Chemical position performs unexpectedly, SV Investment 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 SV Investment will offset losses from the drop in SV Investment'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 |
| SV Investment vs. Samsung Electronics Co | SV Investment vs. Hyundai Engineering Construction | SV Investment vs. Sungmoon Electronics Co | SV Investment vs. Daewoo Engineering Construction |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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