Correlation Between Miwon Chemicals and OCI Co
Can any of the company-specific risk be diversified away by investing in both Miwon Chemicals and OCI Co 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 Chemicals and OCI Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Miwon Chemicals Co and OCI Co, you can compare the effects of market volatilities on Miwon Chemicals and OCI Co 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 Chemicals with a short position of OCI Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miwon Chemicals and OCI Co.
Diversification Opportunities for Miwon Chemicals and OCI Co
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Miwon and OCI is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Miwon Chemicals Co and OCI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OCI Co and Miwon Chemicals 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 Chemicals Co are associated (or correlated) with OCI Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OCI Co has no effect on the direction of Miwon Chemicals i.e., Miwon Chemicals and OCI Co go up and down completely randomly.
Pair Corralation between Miwon Chemicals and OCI Co
Assuming the 90 days trading horizon Miwon Chemicals Co is expected to generate 0.36 times more return on investment than OCI Co. However, Miwon Chemicals Co is 2.75 times less risky than OCI Co. It trades about 0.1 of its potential returns per unit of risk. OCI Co is currently generating about -0.06 per unit of risk. If you would invest 6,606,288 in Miwon Chemicals Co on September 14, 2024 and sell it today you would earn a total of 1,443,712 from holding Miwon Chemicals Co or generate 21.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Miwon Chemicals Co vs. OCI Co
Performance |
| Timeline |
| Miwon Chemicals |
| OCI Co |
Miwon Chemicals and OCI Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Miwon Chemicals and OCI Co
The main advantage of trading using opposite Miwon Chemicals and OCI Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miwon Chemicals position performs unexpectedly, OCI Co 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 OCI Co will offset losses from the drop in OCI Co's long position.| Miwon Chemicals vs. Samsung Electronics Co | Miwon Chemicals vs. Samsung Electronics Co | Miwon Chemicals vs. SK Hynix | Miwon Chemicals vs. POSCO Holdings |
| OCI Co vs. Solution Advanced Technology | OCI Co vs. Koh Young Technology | OCI Co vs. Hwangkum Steel Technology | OCI Co vs. Organic Special Pet |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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