Correlation Between Dongjin Semichem and Woori Technology
Can any of the company-specific risk be diversified away by investing in both Dongjin Semichem 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 Dongjin Semichem and Woori Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongjin Semichem Co and Woori Technology Investment, you can compare the effects of market volatilities on Dongjin Semichem 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 Dongjin Semichem with a short position of Woori Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongjin Semichem and Woori Technology.
Diversification Opportunities for Dongjin Semichem and Woori Technology
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dongjin and Woori is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Dongjin Semichem 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 Dongjin Semichem 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 Dongjin Semichem 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 Dongjin Semichem i.e., Dongjin Semichem and Woori Technology go up and down completely randomly.
Pair Corralation between Dongjin Semichem and Woori Technology
Assuming the 90 days trading horizon Dongjin Semichem Co is expected to under-perform the Woori Technology. But the stock apears to be less risky and, when comparing its historical volatility, Dongjin Semichem Co is 1.44 times less risky than Woori Technology. The stock trades about -0.14 of its potential returns per unit of risk. The Woori Technology Investment is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 669,000 in Woori Technology Investment on September 4, 2024 and sell it today you would earn a total of 285,000 from holding Woori Technology Investment or generate 42.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongjin Semichem Co vs. Woori Technology Investment
Performance |
| Timeline |
| Dongjin Semichem |
| Woori Technology Inv |
Dongjin Semichem and Woori Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongjin Semichem and Woori Technology
The main advantage of trading using opposite Dongjin Semichem and Woori Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongjin Semichem 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.| Dongjin Semichem vs. LG Chemicals | Dongjin Semichem vs. POSCO Holdings | Dongjin Semichem vs. Lotte Chemical Corp | Dongjin Semichem vs. Hyundai Steel |
| Woori Technology vs. Dongjin Semichem Co | Woori Technology vs. AhnLab Inc | Woori Technology vs. Posco ICT | Woori Technology vs. CJ ENM |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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