Correlation Between Wonil Special and UNISEM
Can any of the company-specific risk be diversified away by investing in both Wonil Special and UNISEM 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 UNISEM 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 UNISEM Co, you can compare the effects of market volatilities on Wonil Special and UNISEM 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 UNISEM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonil Special and UNISEM.
Diversification Opportunities for Wonil Special and UNISEM
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wonil and UNISEM is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Wonil Special Steel and UNISEM Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNISEM 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 UNISEM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNISEM has no effect on the direction of Wonil Special i.e., Wonil Special and UNISEM go up and down completely randomly.
Pair Corralation between Wonil Special and UNISEM
Assuming the 90 days trading horizon Wonil Special Steel is expected to generate 0.41 times more return on investment than UNISEM. However, Wonil Special Steel is 2.43 times less risky than UNISEM. It trades about -0.11 of its potential returns per unit of risk. UNISEM Co is currently generating about -0.23 per unit of risk. If you would invest 752,000 in Wonil Special Steel on September 5, 2024 and sell it today you would lose (46,000) from holding Wonil Special Steel or give up 6.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wonil Special Steel vs. UNISEM Co
Performance |
| Timeline |
| Wonil Special Steel |
| UNISEM |
Wonil Special and UNISEM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonil Special and UNISEM
The main advantage of trading using opposite Wonil Special and UNISEM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonil Special position performs unexpectedly, UNISEM 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 UNISEM will offset losses from the drop in UNISEM's long position.| Wonil Special vs. LG Chemicals | Wonil Special vs. Lotte Chemical Corp | Wonil Special vs. Hyundai Steel | Wonil Special vs. Dongkuk Steel Mill |
| UNISEM vs. Seah Steel Corp | UNISEM vs. Samhyun Steel Co | UNISEM vs. Daehan Steel | UNISEM vs. Wonil Special Steel |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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