Correlation Between Woori Technology and Samsung Special
Can any of the company-specific risk be diversified away by investing in both Woori Technology and Samsung Special 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 Samsung Special 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 Samsung Special Purpose, you can compare the effects of market volatilities on Woori Technology and Samsung Special 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 Samsung Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Samsung Special.
Diversification Opportunities for Woori Technology and Samsung Special
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Woori and Samsung is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology Investment and Samsung Special Purpose in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Special Purpose 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 Samsung Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Special Purpose has no effect on the direction of Woori Technology i.e., Woori Technology and Samsung Special go up and down completely randomly.
Pair Corralation between Woori Technology and Samsung Special
Assuming the 90 days trading horizon Woori Technology Investment is expected to generate 1.28 times more return on investment than Samsung Special. However, Woori Technology is 1.28 times more volatile than Samsung Special Purpose. It trades about 0.17 of its potential returns per unit of risk. Samsung Special Purpose is currently generating about 0.04 per unit of risk. If you would invest 648,000 in Woori Technology Investment on September 6, 2024 and sell it today you would earn a total of 302,000 from holding Woori Technology Investment or generate 46.6% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Woori Technology Investment vs. Samsung Special Purpose
Performance |
Timeline |
Woori Technology Inv |
Samsung Special Purpose |
Woori Technology and Samsung Special Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Woori Technology and Samsung Special
The main advantage of trading using opposite Woori Technology and Samsung Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, Samsung Special 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 Samsung Special will offset losses from the drop in Samsung Special's long position.Woori Technology vs. Humasis Co | Woori Technology vs. JUSUNG ENGINEERING Co | Woori Technology vs. Winix Inc | Woori Technology vs. AfreecaTV Co |
Samsung Special vs. InfoBank | Samsung Special vs. Hana Financial | Samsung Special vs. Jeju Bank | Samsung Special vs. Dgb Financial |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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