Correlation Between Hotel Shilla and Woori Technology
Can any of the company-specific risk be diversified away by investing in both Hotel Shilla 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 Hotel Shilla and Woori Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hotel Shilla Co and Woori Technology, you can compare the effects of market volatilities on Hotel Shilla 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 Hotel Shilla with a short position of Woori Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Shilla and Woori Technology.
Diversification Opportunities for Hotel Shilla and Woori Technology
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hotel and Woori is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Shilla Co and Woori Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Technology and Hotel Shilla 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 Hotel Shilla 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 Hotel Shilla i.e., Hotel Shilla and Woori Technology go up and down completely randomly.
Pair Corralation between Hotel Shilla and Woori Technology
Assuming the 90 days trading horizon Hotel Shilla Co is expected to under-perform the Woori Technology. But the stock apears to be less risky and, when comparing its historical volatility, Hotel Shilla Co is 3.63 times less risky than Woori Technology. The stock trades about -0.09 of its potential returns per unit of risk. The Woori Technology is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 176,500 in Woori Technology on October 24, 2024 and sell it today you would earn a total of 30,000 from holding Woori Technology or generate 17.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hotel Shilla Co vs. Woori Technology
Performance |
| Timeline |
| Hotel Shilla |
| Woori Technology |
Hotel Shilla and Woori Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Shilla and Woori Technology
The main advantage of trading using opposite Hotel Shilla and Woori Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Shilla 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.| Hotel Shilla vs. Industrial Bank | Hotel Shilla vs. Shinil Electronics Co | Hotel Shilla vs. Korea Electronic Certification | Hotel Shilla vs. Seoul Electronics Telecom |
| Woori Technology vs. Kyeryong Construction Industrial | Woori Technology vs. Hyundai Engineering Construction | Woori Technology vs. ENERGYMACHINERY KOREA CoLtd | Woori Technology vs. Hotel Shilla Co |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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