Correlation Between Miwon Chemicals and Daejung Chemicals
Can any of the company-specific risk be diversified away by investing in both Miwon Chemicals and Daejung Chemicals 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 Daejung Chemicals 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 Daejung Chemicals Metals, you can compare the effects of market volatilities on Miwon Chemicals and Daejung Chemicals 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 Daejung Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miwon Chemicals and Daejung Chemicals.
Diversification Opportunities for Miwon Chemicals and Daejung Chemicals
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Miwon and Daejung is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Miwon Chemicals Co and Daejung Chemicals Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daejung Chemicals Metals 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 Daejung Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daejung Chemicals Metals has no effect on the direction of Miwon Chemicals i.e., Miwon Chemicals and Daejung Chemicals go up and down completely randomly.
Pair Corralation between Miwon Chemicals and Daejung Chemicals
Assuming the 90 days trading horizon Miwon Chemicals Co is expected to generate 0.43 times more return on investment than Daejung Chemicals. However, Miwon Chemicals Co is 2.33 times less risky than Daejung Chemicals. It trades about -0.26 of its potential returns per unit of risk. Daejung Chemicals Metals is currently generating about -0.17 per unit of risk. If you would invest 7,990,000 in Miwon Chemicals Co on August 27, 2024 and sell it today you would lose (320,000) from holding Miwon Chemicals Co or give up 4.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Miwon Chemicals Co vs. Daejung Chemicals Metals
Performance |
| Timeline |
| Miwon Chemicals |
| Daejung Chemicals Metals |
Miwon Chemicals and Daejung Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Miwon Chemicals and Daejung Chemicals
The main advantage of trading using opposite Miwon Chemicals and Daejung Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miwon Chemicals position performs unexpectedly, Daejung Chemicals 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 Daejung Chemicals will offset losses from the drop in Daejung Chemicals' long position.| Miwon Chemicals vs. AptaBio Therapeutics | Miwon Chemicals vs. Daewoo SBI SPAC | Miwon Chemicals vs. Dream Security co | Miwon Chemicals vs. Microfriend |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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