Correlation Between Miwon Chemicals and Haesung Industrial
Can any of the company-specific risk be diversified away by investing in both Miwon Chemicals and Haesung Industrial 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 Haesung Industrial 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 Haesung Industrial Co, you can compare the effects of market volatilities on Miwon Chemicals and Haesung Industrial 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 Haesung Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miwon Chemicals and Haesung Industrial.
Diversification Opportunities for Miwon Chemicals and Haesung Industrial
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Miwon and Haesung is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Miwon Chemicals Co and Haesung Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haesung Industrial 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 Haesung Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haesung Industrial has no effect on the direction of Miwon Chemicals i.e., Miwon Chemicals and Haesung Industrial go up and down completely randomly.
Pair Corralation between Miwon Chemicals and Haesung Industrial
Assuming the 90 days trading horizon Miwon Chemicals Co is expected to generate 0.52 times more return on investment than Haesung Industrial. However, Miwon Chemicals Co is 1.92 times less risky than Haesung Industrial. It trades about 0.1 of its potential returns per unit of risk. Haesung Industrial Co is currently generating about -0.06 per unit of risk. If you would invest 6,498,672 in Miwon Chemicals Co on October 18, 2024 and sell it today you would earn a total of 1,341,328 from holding Miwon Chemicals Co or generate 20.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Miwon Chemicals Co vs. Haesung Industrial Co
Performance |
| Timeline |
| Miwon Chemicals |
| Haesung Industrial |
Miwon Chemicals and Haesung Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Miwon Chemicals and Haesung Industrial
The main advantage of trading using opposite Miwon Chemicals and Haesung Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miwon Chemicals position performs unexpectedly, Haesung Industrial 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 Haesung Industrial will offset losses from the drop in Haesung Industrial's long position.| Miwon Chemicals vs. Daejoo Electronic Materials | Miwon Chemicals vs. Daeduck Electronics Co | Miwon Chemicals vs. LG Household Healthcare | Miwon Chemicals vs. Cuckoo Electronics Co |
| Haesung Industrial vs. Moonbae Steel | Haesung Industrial vs. Seah Steel Corp | Haesung Industrial vs. Fine Besteel Co | Haesung Industrial vs. Finebesteel |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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