Correlation Between Wireless Power and Woori Technology

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

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

Diversification Opportunities for Wireless Power and Woori Technology

-0.63

Correlation Coefficient

Wireless Power  Woori Technology

Excellent diversification

The 3 months correlation between Wireless and Woori is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Wireless Power Amplifier 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 Wireless Power 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 Wireless Power Amplifier 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 Wireless Power i.e., Wireless Power and Woori Technology go up and down completely randomly.

Pair Corralation between Wireless Power and Woori Technology

Assuming the 90 days trading horizon Wireless Power is expected to generate 3.81 times less return on investment than Woori Technology. But when comparing it to its historical volatility, Wireless Power Amplifier is 1.42 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 0.05 of returns per unit of risk over similar time horizon. If you would invest  450,000  in Woori Technology Investment on October 10, 2024 and sell it today you would earn a total of  359,000  from holding Woori Technology Investment or generate 79.78% return on investment over 90 days.

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

Wireless Power Amplifier  vs.  Woori Technology Investment

Wireless Power Amplifier

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Wireless Power Amplifier are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Wireless Power may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Woori Technology Inv

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Woori Technology Investment are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Woori Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wireless Power and Woori Technology

The main advantage of trading using opposite Wireless Power and Woori Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wireless Power 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 Wireless Power Amplifier 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.