Correlation Between Miwon Chemical and Hyosung Chemical
Can any of the company-specific risk be diversified away by investing in both Miwon Chemical and Hyosung Chemical 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 Hyosung Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Miwon Chemical and Hyosung Chemical Corp, you can compare the effects of market volatilities on Miwon Chemical and Hyosung Chemical 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 Hyosung Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miwon Chemical and Hyosung Chemical.
Diversification Opportunities for Miwon Chemical and Hyosung Chemical
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Miwon and Hyosung is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Miwon Chemical and Hyosung Chemical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyosung Chemical Corp 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 Hyosung Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyosung Chemical Corp has no effect on the direction of Miwon Chemical i.e., Miwon Chemical and Hyosung Chemical go up and down completely randomly.
Pair Corralation between Miwon Chemical and Hyosung Chemical
Assuming the 90 days trading horizon Miwon Chemical is expected to generate 0.31 times more return on investment than Hyosung Chemical. However, Miwon Chemical is 3.27 times less risky than Hyosung Chemical. It trades about 0.04 of its potential returns per unit of risk. Hyosung Chemical Corp is currently generating about -0.08 per unit of risk. If you would invest 6,942,982 in Miwon Chemical on September 12, 2024 and sell it today you would earn a total of 957,018 from holding Miwon Chemical or generate 13.78% 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. Hyosung Chemical Corp
Performance |
| Timeline |
| Miwon Chemical |
| Hyosung Chemical Corp |
Miwon Chemical and Hyosung Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Miwon Chemical and Hyosung Chemical
The main advantage of trading using opposite Miwon Chemical and Hyosung Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miwon Chemical position performs unexpectedly, Hyosung Chemical 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 Hyosung Chemical will offset losses from the drop in Hyosung Chemical's long position.| Miwon Chemical vs. LG Chem | Miwon Chemical vs. Chunbo Co | Miwon Chemical vs. DukSan Neolux CoLtd | Miwon Chemical vs. Hyosung Chemical Corp |
| Hyosung Chemical vs. LG Chem | Hyosung Chemical vs. Chunbo Co | Hyosung Chemical vs. DukSan Neolux CoLtd | Hyosung Chemical vs. LIG ES SPAC |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |