Correlation Between Miwon Chemicals and Hyosung Heavy
Can any of the company-specific risk be diversified away by investing in both Miwon Chemicals and Hyosung Heavy 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 Hyosung Heavy 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 Hyosung Heavy Industries, you can compare the effects of market volatilities on Miwon Chemicals and Hyosung Heavy 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 Hyosung Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miwon Chemicals and Hyosung Heavy.
Diversification Opportunities for Miwon Chemicals and Hyosung Heavy
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Miwon and Hyosung is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Miwon Chemicals Co and Hyosung Heavy Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyosung Heavy Industries 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 Hyosung Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyosung Heavy Industries has no effect on the direction of Miwon Chemicals i.e., Miwon Chemicals and Hyosung Heavy go up and down completely randomly.
Pair Corralation between Miwon Chemicals and Hyosung Heavy
Assuming the 90 days trading horizon Miwon Chemicals Co is expected to generate 0.29 times more return on investment than Hyosung Heavy. However, Miwon Chemicals Co is 3.49 times less risky than Hyosung Heavy. It trades about 0.01 of its potential returns per unit of risk. Hyosung Heavy Industries is currently generating about -0.15 per unit of risk. If you would invest 7,930,000 in Miwon Chemicals Co on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Miwon Chemicals Co or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Miwon Chemicals Co vs. Hyosung Heavy Industries
Performance |
| Timeline |
| Miwon Chemicals |
| Hyosung Heavy Industries |
Miwon Chemicals and Hyosung Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Miwon Chemicals and Hyosung Heavy
The main advantage of trading using opposite Miwon Chemicals and Hyosung Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miwon Chemicals position performs unexpectedly, Hyosung Heavy 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 Heavy will offset losses from the drop in Hyosung Heavy'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 |
| Hyosung Heavy vs. LG Energy Solution | Hyosung Heavy vs. Doosan Heavy Ind | Hyosung Heavy vs. Aprogen KIC | Hyosung Heavy vs. Korea Refract |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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