Correlation Between Woori Technology and Automobile
Can any of the company-specific risk be diversified away by investing in both Woori Technology and Automobile 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 Woori Technology and Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woori Technology Investment and Automobile Pc, you can compare the effects of market volatilities on Woori Technology and Automobile 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 Woori Technology with a short position of Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Automobile.
Diversification Opportunities for Woori Technology and Automobile
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Woori and Automobile is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology Investment and Automobile Pc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automobile Pc and Woori Technology 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 Woori Technology Investment are associated (or correlated) with Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automobile Pc has no effect on the direction of Woori Technology i.e., Woori Technology and Automobile go up and down completely randomly.
Pair Corralation between Woori Technology and Automobile
Assuming the 90 days trading horizon Woori Technology Investment is expected to under-perform the Automobile. In addition to that, Woori Technology is 1.45 times more volatile than Automobile Pc. It trades about -0.3 of its total potential returns per unit of risk. Automobile Pc is currently generating about -0.17 per unit of volatility. If you would invest 67,400 in Automobile Pc on September 25, 2024 and sell it today you would lose (7,600) from holding Automobile Pc or give up 11.28% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Woori Technology Investment vs. Automobile Pc
Performance |
Timeline |
Woori Technology Inv |
Automobile Pc |
Woori Technology and Automobile Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Woori Technology and Automobile
The main advantage of trading using opposite Woori Technology and Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, Automobile 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 Automobile will offset losses from the drop in Automobile's long position.Woori Technology vs. Humasis Co | Woori Technology vs. JUSUNG ENGINEERING Co | Woori Technology vs. Winix Inc | Woori Technology vs. AfreecaTV Co |
Automobile vs. Daejoo Electronic Materials | Automobile vs. Hana Materials | Automobile vs. WONIK Materials CoLtd | Automobile vs. LAKE MATERIALS LTD |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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