Correlation Between Miwon Chemicals and Samhyun Steel
Can any of the company-specific risk be diversified away by investing in both Miwon Chemicals and Samhyun Steel 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 Samhyun Steel 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 Samhyun Steel Co, you can compare the effects of market volatilities on Miwon Chemicals and Samhyun Steel 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 Samhyun Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miwon Chemicals and Samhyun Steel.
Diversification Opportunities for Miwon Chemicals and Samhyun Steel
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Miwon and Samhyun is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Miwon Chemicals Co and Samhyun Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhyun Steel 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 Samhyun Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhyun Steel has no effect on the direction of Miwon Chemicals i.e., Miwon Chemicals and Samhyun Steel go up and down completely randomly.
Pair Corralation between Miwon Chemicals and Samhyun Steel
Assuming the 90 days trading horizon Miwon Chemicals is expected to generate 2.53 times less return on investment than Samhyun Steel. But when comparing it to its historical volatility, Miwon Chemicals Co is 1.09 times less risky than Samhyun Steel. It trades about 0.03 of its potential returns per unit of risk. Samhyun Steel Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 440,275 in Samhyun Steel Co on October 13, 2024 and sell it today you would earn a total of 5,725 from holding Samhyun Steel Co or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Miwon Chemicals Co vs. Samhyun Steel Co
Performance |
| Timeline |
| Miwon Chemicals |
| Samhyun Steel |
Miwon Chemicals and Samhyun Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Miwon Chemicals and Samhyun Steel
The main advantage of trading using opposite Miwon Chemicals and Samhyun Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miwon Chemicals position performs unexpectedly, Samhyun Steel 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 Samhyun Steel will offset losses from the drop in Samhyun Steel's long position.| Miwon Chemicals vs. Kolon Plastics | Miwon Chemicals vs. Korea Air Svc | Miwon Chemicals vs. Jeju Air Co | Miwon Chemicals vs. WONIK Materials CoLtd |
| Samhyun Steel vs. DB Insurance Co | Samhyun Steel vs. Daewon Media Co | Samhyun Steel vs. SAMG Entertainment Co | Samhyun Steel vs. Miwon Chemicals Co |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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