Correlation Between WISE ITech and Woori Technology
Can any of the company-specific risk be diversified away by investing in both WISE ITech 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 WISE ITech and Woori Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WISE iTech Co and Woori Technology Investment, you can compare the effects of market volatilities on WISE ITech 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 WISE ITech with a short position of Woori Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of WISE ITech and Woori Technology.
Diversification Opportunities for WISE ITech and Woori Technology
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WISE and Woori is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding WISE iTech 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 WISE ITech 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 WISE iTech 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 WISE ITech i.e., WISE ITech and Woori Technology go up and down completely randomly.
Pair Corralation between WISE ITech and Woori Technology
Assuming the 90 days trading horizon WISE iTech Co is expected to generate 2.55 times more return on investment than Woori Technology. However, WISE ITech is 2.55 times more volatile than Woori Technology Investment. It trades about 0.15 of its potential returns per unit of risk. Woori Technology Investment is currently generating about -0.23 per unit of risk. If you would invest 498,426 in WISE iTech Co on December 3, 2024 and sell it today you would earn a total of 342,574 from holding WISE iTech Co or generate 68.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
WISE iTech Co vs. Woori Technology Investment
Performance |
Timeline |
WISE iTech |
Woori Technology Inv |
WISE ITech and Woori Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with WISE ITech and Woori Technology
The main advantage of trading using opposite WISE ITech and Woori Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WISE ITech 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.WISE ITech vs. Dongil Metal Co | WISE ITech vs. Eugene Investment Securities | WISE ITech vs. MetaLabs Co | WISE ITech vs. Woori Technology Investment |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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