Correlation Between Yura Tech and Woori Technology

Can any of the company-specific risk be diversified away by investing in both Yura Tech and Woori Technology 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 Yura Tech and Woori Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Yura Tech Co and Woori Technology Investment, you can compare the effects of market volatilities on Yura Tech and Woori Technology 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 Yura Tech with a short position of Woori Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yura Tech and Woori Technology.

Diversification Opportunities for Yura Tech and Woori Technology

-0.64

Correlation Coefficient

Yura Tech  Woori Technology

Excellent diversification

The 3 months correlation between Yura and Woori is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Yura Tech Co and Woori Technology Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Technology Inv and Yura Tech 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 Yura Tech Co are associated (or correlated) with Woori Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woori Technology Inv has no effect on the direction of Yura Tech i.e., Yura Tech and Woori Technology go up and down completely randomly.

Pair Corralation between Yura Tech and Woori Technology

Assuming the 90 days trading horizon Yura Tech is expected to generate 2.42 times less return on investment than Woori Technology. But when comparing it to its historical volatility, Yura Tech Co is 1.46 times less risky than Woori Technology. It trades about 0.02 of its potential returns per unit of risk. Woori Technology Investment is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  563,000  in Woori Technology Investment on October 15, 2024 and sell it today you would earn a total of  213,000  from holding Woori Technology Investment or generate 37.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Yura Tech Co  vs.  Woori Technology Investment

Yura Tech

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yura Tech Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Yura Tech sustained solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Yura Tech and Woori Technology

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

The idea behind Yura Tech Co and Woori Technology Investment 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.