Correlation Between Daelim Trading and Woori Technology
Can any of the company-specific risk be diversified away by investing in both Daelim Trading 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 Daelim Trading and Woori Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daelim Trading Co and Woori Technology, you can compare the effects of market volatilities on Daelim Trading 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 Daelim Trading with a short position of Woori Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daelim Trading and Woori Technology.
Diversification Opportunities for Daelim Trading and Woori Technology
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daelim and Woori is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Daelim Trading Co and Woori Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Technology and Daelim Trading 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 Daelim Trading 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 has no effect on the direction of Daelim Trading i.e., Daelim Trading and Woori Technology go up and down completely randomly.
Pair Corralation between Daelim Trading and Woori Technology
Assuming the 90 days trading horizon Daelim Trading Co is expected to generate 0.79 times more return on investment than Woori Technology. However, Daelim Trading Co is 1.26 times less risky than Woori Technology. It trades about -0.04 of its potential returns per unit of risk. Woori Technology is currently generating about -0.06 per unit of risk. If you would invest 283,000 in Daelim Trading Co on October 14, 2024 and sell it today you would lose (22,000) from holding Daelim Trading Co or give up 7.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daelim Trading Co vs. Woori Technology
Performance |
| Timeline |
| Daelim Trading |
| Woori Technology |
Daelim Trading and Woori Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daelim Trading and Woori Technology
The main advantage of trading using opposite Daelim Trading and Woori Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daelim Trading 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.| Daelim Trading vs. Jeong Moon Information | Daelim Trading vs. Nice Information Telecommunication | Daelim Trading vs. Alton Sports CoLtd | Daelim Trading vs. Hanshin Construction Co |
| Woori Technology vs. Youl Chon Chemical | Woori Technology vs. Daelim Trading Co | Woori Technology vs. Atinum Investment Co | Woori Technology vs. Woori Technology 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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