Correlation Between Wonil Special and Samick Musical
Can any of the company-specific risk be diversified away by investing in both Wonil Special and Samick Musical 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 Wonil Special and Samick Musical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wonil Special Steel and Samick Musical Instruments, you can compare the effects of market volatilities on Wonil Special and Samick Musical 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 Wonil Special with a short position of Samick Musical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonil Special and Samick Musical.
Diversification Opportunities for Wonil Special and Samick Musical
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wonil and Samick is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Wonil Special Steel and Samick Musical Instruments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samick Musical Instr and Wonil Special 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 Wonil Special Steel are associated (or correlated) with Samick Musical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samick Musical Instr has no effect on the direction of Wonil Special i.e., Wonil Special and Samick Musical go up and down completely randomly.
Pair Corralation between Wonil Special and Samick Musical
Assuming the 90 days trading horizon Wonil Special Steel is expected to under-perform the Samick Musical. But the stock apears to be less risky and, when comparing its historical volatility, Wonil Special Steel is 8.59 times less risky than Samick Musical. The stock trades about -0.12 of its potential returns per unit of risk. The Samick Musical Instruments is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 116,100 in Samick Musical Instruments on November 9, 2024 and sell it today you would earn a total of 5,500 from holding Samick Musical Instruments or generate 4.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wonil Special Steel vs. Samick Musical Instruments
Performance |
| Timeline |
| Wonil Special Steel |
| Samick Musical Instr |
Wonil Special and Samick Musical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonil Special and Samick Musical
The main advantage of trading using opposite Wonil Special and Samick Musical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonil Special position performs unexpectedly, Samick Musical 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 Samick Musical will offset losses from the drop in Samick Musical's long position.| Wonil Special vs. Tae Kyung Chemical | Wonil Special vs. TK Chemical | Wonil Special vs. DSC Investment | Wonil Special vs. Samyung Trading Co |
| Samick Musical vs. Woori Technology | Samick Musical vs. Lotte Chilsung Beverage | Samick Musical vs. Digital Imaging Technology | Samick Musical vs. Global Standard Technology |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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