Correlation Between SEOJEON ELECTRIC and Miwon Chemicals
Can any of the company-specific risk be diversified away by investing in both SEOJEON ELECTRIC and Miwon 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 SEOJEON ELECTRIC and Miwon Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEOJEON ELECTRIC MACHINERY and Miwon Chemicals Co, you can compare the effects of market volatilities on SEOJEON ELECTRIC and Miwon 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 SEOJEON ELECTRIC with a short position of Miwon Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEOJEON ELECTRIC and Miwon Chemicals.
Diversification Opportunities for SEOJEON ELECTRIC and Miwon Chemicals
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between SEOJEON and Miwon is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding SEOJEON ELECTRIC MACHINERY and Miwon Chemicals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miwon Chemicals and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC MACHINERY are associated (or correlated) with Miwon Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miwon Chemicals has no effect on the direction of SEOJEON ELECTRIC i.e., SEOJEON ELECTRIC and Miwon Chemicals go up and down completely randomly.
Pair Corralation between SEOJEON ELECTRIC and Miwon Chemicals
Assuming the 90 days trading horizon SEOJEON ELECTRIC MACHINERY is expected to generate 3.04 times more return on investment than Miwon Chemicals. However, SEOJEON ELECTRIC is 3.04 times more volatile than Miwon Chemicals Co. It trades about 0.15 of its potential returns per unit of risk. Miwon Chemicals Co is currently generating about 0.09 per unit of risk. If you would invest 405,000 in SEOJEON ELECTRIC MACHINERY on October 17, 2024 and sell it today you would earn a total of 39,000 from holding SEOJEON ELECTRIC MACHINERY or generate 9.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEOJEON ELECTRIC MACHINERY vs. Miwon Chemicals Co
Performance |
| Timeline |
| SEOJEON ELECTRIC MAC |
| Miwon Chemicals |
SEOJEON ELECTRIC and Miwon Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEOJEON ELECTRIC and Miwon Chemicals
The main advantage of trading using opposite SEOJEON ELECTRIC and Miwon Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEOJEON ELECTRIC position performs unexpectedly, Miwon 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 Miwon Chemicals will offset losses from the drop in Miwon Chemicals' long position.| SEOJEON ELECTRIC vs. HB Technology TD | SEOJEON ELECTRIC vs. NewFlex Technology Co | SEOJEON ELECTRIC vs. AeroSpace Technology of | SEOJEON ELECTRIC vs. Eugene Technology CoLtd |
| Miwon Chemicals vs. Seohee Construction Co | Miwon Chemicals vs. SEOJEON ELECTRIC MACHINERY | Miwon Chemicals vs. PH Tech Co | Miwon Chemicals vs. KEPCO Engineering Construction |
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 Stocks Directory module to find actively traded stocks across global markets.
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