Correlation Between Top Material and Miwon Chemicals
Can any of the company-specific risk be diversified away by investing in both Top Material 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 Top Material and Miwon Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Top Material Co and Miwon Chemicals Co, you can compare the effects of market volatilities on Top Material 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 Top Material with a short position of Miwon Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Top Material and Miwon Chemicals.
Diversification Opportunities for Top Material and Miwon Chemicals
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Top and Miwon is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Top Material Co and Miwon Chemicals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miwon Chemicals and Top Material 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 Top Material Co 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 Top Material i.e., Top Material and Miwon Chemicals go up and down completely randomly.
Pair Corralation between Top Material and Miwon Chemicals
Assuming the 90 days trading horizon Top Material Co is expected to under-perform the Miwon Chemicals. In addition to that, Top Material is 4.39 times more volatile than Miwon Chemicals Co. It trades about -0.02 of its total potential returns per unit of risk. Miwon Chemicals Co is currently generating about 0.07 per unit of volatility. If you would invest 5,735,237 in Miwon Chemicals Co on November 27, 2024 and sell it today you would earn a total of 2,014,763 from holding Miwon Chemicals Co or generate 35.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Top Material Co vs. Miwon Chemicals Co
Performance |
| Timeline |
| Top Material |
| Miwon Chemicals |
Top Material and Miwon Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Top Material and Miwon Chemicals
The main advantage of trading using opposite Top Material and Miwon Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Top Material 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.| Top Material vs. Youngsin Metal Industrial | Top Material vs. Kukil Metal Co | Top Material vs. PJ Metal Co | Top Material vs. Formetal Co |
| Miwon Chemicals vs. Dongil Metal Co | Miwon Chemicals vs. Hankukpackage Co | Miwon Chemicals vs. Sam Yang Foods | Miwon Chemicals vs. Samyang Foods Co |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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