Correlation Between Youl Chon and Woori Technology
Can any of the company-specific risk be diversified away by investing in both Youl Chon 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 Youl Chon and Woori Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Youl Chon Chemical and Woori Technology, you can compare the effects of market volatilities on Youl Chon 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 Youl Chon with a short position of Woori Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Youl Chon and Woori Technology.
Diversification Opportunities for Youl Chon and Woori Technology
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Youl and Woori is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Youl Chon Chemical and Woori Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Technology and Youl Chon 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 Youl Chon Chemical 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 Youl Chon i.e., Youl Chon and Woori Technology go up and down completely randomly.
Pair Corralation between Youl Chon and Woori Technology
Assuming the 90 days trading horizon Youl Chon Chemical is expected to generate 1.05 times more return on investment than Woori Technology. However, Youl Chon is 1.05 times more volatile than Woori Technology. It trades about -0.05 of its potential returns per unit of risk. Woori Technology is currently generating about -0.06 per unit of risk. If you would invest 2,722,280 in Youl Chon Chemical on October 14, 2024 and sell it today you would lose (392,280) from holding Youl Chon Chemical or give up 14.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Youl Chon Chemical vs. Woori Technology
Performance |
| Timeline |
| Youl Chon Chemical |
| Woori Technology |
Youl Chon and Woori Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Youl Chon and Woori Technology
The main advantage of trading using opposite Youl Chon and Woori Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Youl Chon 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.| Youl Chon vs. AptaBio Therapeutics | Youl Chon vs. Daewoo SBI SPAC | Youl Chon vs. Dream Security co | Youl Chon vs. Microfriend |
| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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