Correlation Between Wonil Special and EV Advanced
Can any of the company-specific risk be diversified away by investing in both Wonil Special and EV Advanced 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 EV Advanced 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 EV Advanced Material, you can compare the effects of market volatilities on Wonil Special and EV Advanced 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 EV Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonil Special and EV Advanced.
Diversification Opportunities for Wonil Special and EV Advanced
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Wonil and 131400 is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Wonil Special Steel and EV Advanced Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EV Advanced Material 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 EV Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EV Advanced Material has no effect on the direction of Wonil Special i.e., Wonil Special and EV Advanced go up and down completely randomly.
Pair Corralation between Wonil Special and EV Advanced
Assuming the 90 days trading horizon Wonil Special Steel is expected to generate 0.42 times more return on investment than EV Advanced. However, Wonil Special Steel is 2.38 times less risky than EV Advanced. It trades about -0.04 of its potential returns per unit of risk. EV Advanced Material is currently generating about -0.25 per unit of risk. If you would invest 727,000 in Wonil Special Steel on November 7, 2024 and sell it today you would lose (3,000) from holding Wonil Special Steel or give up 0.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wonil Special Steel vs. EV Advanced Material
Performance |
| Timeline |
| Wonil Special Steel |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| EV Advanced Material |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Wonil Special and EV Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonil Special and EV Advanced
The main advantage of trading using opposite Wonil Special and EV Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonil Special position performs unexpectedly, EV Advanced 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 EV Advanced will offset losses from the drop in EV Advanced's long position.The idea behind Wonil Special Steel and EV Advanced Material pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| EV Advanced vs. Samsung Electronics Co | EV Advanced vs. Samsung Electronics Co | EV Advanced vs. Hyundai Motor Co | EV Advanced vs. LG Electronics |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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