Correlation Between Woori Technology and E Investment

Can any of the company-specific risk be diversified away by investing in both Woori Technology and E Investment 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 E Investment 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 E Investment Development, you can compare the effects of market volatilities on Woori Technology and E Investment 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 E Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and E Investment.

Diversification Opportunities for Woori Technology and E Investment

0.0

Correlation Coefficient

Woori Technology  E Investment

Pay attention - limited upside

The 3 months correlation between Woori and 093230 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology Investment and E Investment Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E Investment Development 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 E Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E Investment Development has no effect on the direction of Woori Technology i.e., Woori Technology and E Investment go up and down completely randomly.

Pair Corralation between Woori Technology and E Investment

Assuming the 90 days trading horizon Woori Technology is expected to generate 1.01 times less return on investment than E Investment. In addition to that, Woori Technology is 1.2 times more volatile than E Investment Development. It trades about 0.04 of its total potential returns per unit of risk. E Investment Development is currently generating about 0.04 per unit of volatility. If you would invest  87,100  in E Investment Development on October 15, 2024 and sell it today you would earn a total of  52,100  from holding E Investment Development or generate 59.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

Woori Technology Investment  vs.  E Investment Development

Woori Technology Inv

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Woori Technology Investment are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Woori Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.

E Investment Development

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days E Investment Development has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, E Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Woori Technology and E Investment

The main advantage of trading using opposite Woori Technology and E Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, E Investment 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 E Investment will offset losses from the drop in E Investment's long position.

The idea behind Woori Technology Investment and E Investment Development pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.