Correlation Between Wonil Special and ChipsMedia
Can any of the company-specific risk be diversified away by investing in both Wonil Special and ChipsMedia 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 ChipsMedia 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 ChipsMedia, you can compare the effects of market volatilities on Wonil Special and ChipsMedia 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 ChipsMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonil Special and ChipsMedia.
Diversification Opportunities for Wonil Special and ChipsMedia
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wonil and ChipsMedia is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Wonil Special Steel and ChipsMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChipsMedia 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 ChipsMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChipsMedia has no effect on the direction of Wonil Special i.e., Wonil Special and ChipsMedia go up and down completely randomly.
Pair Corralation between Wonil Special and ChipsMedia
Assuming the 90 days trading horizon Wonil Special Steel is expected to generate 0.4 times more return on investment than ChipsMedia. However, Wonil Special Steel is 2.52 times less risky than ChipsMedia. It trades about -0.08 of its potential returns per unit of risk. ChipsMedia is currently generating about -0.11 per unit of risk. If you would invest 836,000 in Wonil Special Steel on August 27, 2024 and sell it today you would lose (123,000) from holding Wonil Special Steel or give up 14.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wonil Special Steel vs. ChipsMedia
Performance |
| Timeline |
| Wonil Special Steel |
| ChipsMedia |
Wonil Special and ChipsMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonil Special and ChipsMedia
The main advantage of trading using opposite Wonil Special and ChipsMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonil Special position performs unexpectedly, ChipsMedia 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 ChipsMedia will offset losses from the drop in ChipsMedia's long position.| Wonil Special vs. Gyeongnam Steel Co | Wonil Special vs. Korea Steel Co | Wonil Special vs. Foodnamoo | Wonil Special vs. CJ Seafood Corp |
| ChipsMedia vs. Korea Real Estate | ChipsMedia vs. Korea Ratings Co | ChipsMedia vs. IQuest Co | ChipsMedia vs. Wonbang Tech 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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