Correlation Between E Investment and Woori Technology

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

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

Diversification Opportunities for E Investment and Woori Technology

0.0

Correlation Coefficient

E Investment  Woori Technology

Pay attention - limited upside

The 3 months correlation between 093230 and Woori is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding E Investment Development 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 E Investment 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 E Investment Development 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 E Investment i.e., E Investment and Woori Technology go up and down completely randomly.

Pair Corralation between E Investment and Woori Technology

If you would invest  139,200  in E Investment Development on September 27, 2024 and sell it today you would earn a total of  0.00  from holding E Investment Development or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

E Investment Development  vs.  Woori Technology Investment

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.

Woori Technology Inv

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with E Investment and Woori Technology

The main advantage of trading using opposite E Investment and Woori Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E Investment 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 E Investment Development 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.

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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.