Correlation Between SFA Engineering and Wonik Ips

Can any of the company-specific risk be diversified away by investing in both SFA Engineering and Wonik Ips 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 SFA Engineering and Wonik Ips into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SFA Engineering and Wonik Ips Co, you can compare the effects of market volatilities on SFA Engineering and Wonik Ips 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 SFA Engineering with a short position of Wonik Ips. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFA Engineering and Wonik Ips.

Diversification Opportunities for SFA Engineering and Wonik Ips

0.51

Correlation Coefficient

SFA Engineering  Wonik Ips

Very weak diversification

The 3 months correlation between SFA and Wonik is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding SFA Engineering and Wonik Ips Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonik Ips and SFA Engineering 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 SFA Engineering are associated (or correlated) with Wonik Ips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonik Ips has no effect on the direction of SFA Engineering i.e., SFA Engineering and Wonik Ips go up and down completely randomly.

Pair Corralation between SFA Engineering and Wonik Ips

Assuming the 90 days trading horizon SFA Engineering is expected to generate 1.42 times less return on investment than Wonik Ips. But when comparing it to its historical volatility, SFA Engineering is 1.85 times less risky than Wonik Ips. It trades about 0.09 of its potential returns per unit of risk. Wonik Ips Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,235,000  in Wonik Ips Co on December 30, 2024 and sell it today you would earn a total of  230,000  from holding Wonik Ips Co or generate 10.29% return on investment over 90 days.

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

SFA Engineering  vs.  Wonik Ips Co

SFA Engineering

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SFA Engineering are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SFA Engineering may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Wonik Ips

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Wonik Ips Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Wonik Ips sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SFA Engineering and Wonik Ips

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

The idea behind SFA Engineering and Wonik Ips Co 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.