Correlation Between Wonil Special and Husteel
Can any of the company-specific risk be diversified away by investing in both Wonil Special and Husteel 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 Husteel 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 Husteel, you can compare the effects of market volatilities on Wonil Special and Husteel 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 Husteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonil Special and Husteel.
Diversification Opportunities for Wonil Special and Husteel
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wonil and Husteel is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Wonil Special Steel and Husteel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Husteel 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 Husteel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Husteel has no effect on the direction of Wonil Special i.e., Wonil Special and Husteel go up and down completely randomly.
Pair Corralation between Wonil Special and Husteel
Assuming the 90 days trading horizon Wonil Special Steel is expected to generate 0.66 times more return on investment than Husteel. However, Wonil Special Steel is 1.52 times less risky than Husteel. It trades about 0.06 of its potential returns per unit of risk. Husteel is currently generating about -0.04 per unit of risk. If you would invest 719,000 in Wonil Special Steel on September 3, 2024 and sell it today you would earn a total of 9,000 from holding Wonil Special Steel or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wonil Special Steel vs. Husteel
Performance |
| Timeline |
| Wonil Special Steel |
| Husteel |
Wonil Special and Husteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonil Special and Husteel
The main advantage of trading using opposite Wonil Special and Husteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonil Special position performs unexpectedly, Husteel 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 Husteel will offset losses from the drop in Husteel's long position.| Wonil Special vs. Samwha Electronics Co | Wonil Special vs. KyungIn Electronics Co | Wonil Special vs. Daou Technology | Wonil Special vs. Cuckoo Electronics Co |
| Husteel vs. Sejong Telecom | Husteel vs. Seoul Electronics Telecom | Husteel vs. Hanwha InvestmentSecurities Co | Husteel vs. Digital Power Communications |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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