Correlation Between Wooyang and HYUNDAI FEED

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

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

Diversification Opportunities for Wooyang and HYUNDAI FEED

0.0

Correlation Coefficient

Wooyang  HYUNDAI FEED

Pay attention - limited upside

The 3 months correlation between Wooyang and HYUNDAI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Wooyang Co and HYUNDAI FEED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYUNDAI FEED and Wooyang 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 Wooyang Co are associated (or correlated) with HYUNDAI FEED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYUNDAI FEED has no effect on the direction of Wooyang i.e., Wooyang and HYUNDAI FEED go up and down completely randomly.

Pair Corralation between Wooyang and HYUNDAI FEED

If you would invest  322,000  in Wooyang Co on September 15, 2024 and sell it today you would earn a total of  1,000.00  from holding Wooyang Co or generate 0.31% return on investment over 90 days.

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

Wooyang Co  vs.  HYUNDAI FEED

Wooyang

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wooyang Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

HYUNDAI FEED

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Wooyang and HYUNDAI FEED

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

The idea behind Wooyang Co and HYUNDAI FEED 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.