Correlation Between Mirai Semiconductors and Kolon Plastics
Can any of the company-specific risk be diversified away by investing in both Mirai Semiconductors and Kolon Plastics 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 Mirai Semiconductors and Kolon Plastics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mirai Semiconductors Co and Kolon Plastics, you can compare the effects of market volatilities on Mirai Semiconductors and Kolon Plastics 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 Mirai Semiconductors with a short position of Kolon Plastics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mirai Semiconductors and Kolon Plastics.
Diversification Opportunities for Mirai Semiconductors and Kolon Plastics
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mirai and Kolon is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Mirai Semiconductors Co and Kolon Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kolon Plastics and Mirai Semiconductors 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 Mirai Semiconductors Co are associated (or correlated) with Kolon Plastics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kolon Plastics has no effect on the direction of Mirai Semiconductors i.e., Mirai Semiconductors and Kolon Plastics go up and down completely randomly.
Pair Corralation between Mirai Semiconductors and Kolon Plastics
Assuming the 90 days trading horizon Mirai Semiconductors Co is expected to generate 1.84 times more return on investment than Kolon Plastics. However, Mirai Semiconductors is 1.84 times more volatile than Kolon Plastics. It trades about 0.06 of its potential returns per unit of risk. Kolon Plastics is currently generating about -0.02 per unit of risk. If you would invest 1,235,000 in Mirai Semiconductors Co on October 28, 2024 and sell it today you would earn a total of 97,000 from holding Mirai Semiconductors Co or generate 7.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mirai Semiconductors Co vs. Kolon Plastics
Performance |
| Timeline |
| Mirai Semiconductors |
| Kolon Plastics |
Mirai Semiconductors and Kolon Plastics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mirai Semiconductors and Kolon Plastics
The main advantage of trading using opposite Mirai Semiconductors and Kolon Plastics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mirai Semiconductors position performs unexpectedly, Kolon Plastics 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 Kolon Plastics will offset losses from the drop in Kolon Plastics' long position.| Mirai Semiconductors vs. Samsung Electronics Co | Mirai Semiconductors vs. Samsung Electronics Co | Mirai Semiconductors vs. LG Energy Solution | Mirai Semiconductors vs. SK Hynix |
| Kolon Plastics vs. KB Financial Group | Kolon Plastics vs. Shinhan Financial Group | Kolon Plastics vs. Hana Financial | Kolon Plastics vs. Woori Financial Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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