Correlation Between Wonil Special and Kolon Plastics
Can any of the company-specific risk be diversified away by investing in both Wonil Special and Kolon Plastics 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 Kolon Plastics 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 Kolon Plastics, you can compare the effects of market volatilities on Wonil Special and Kolon Plastics 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 Kolon Plastics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonil Special and Kolon Plastics.
Diversification Opportunities for Wonil Special and Kolon Plastics
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Wonil and Kolon is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Wonil Special Steel and Kolon Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kolon Plastics 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 Kolon Plastics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kolon Plastics has no effect on the direction of Wonil Special i.e., Wonil Special and Kolon Plastics go up and down completely randomly.
Pair Corralation between Wonil Special and Kolon Plastics
Assuming the 90 days trading horizon Wonil Special Steel is expected to generate 0.49 times more return on investment than Kolon Plastics. However, Wonil Special Steel is 2.04 times less risky than Kolon Plastics. It trades about 0.22 of its potential returns per unit of risk. Kolon Plastics is currently generating about -0.04 per unit of risk. If you would invest 703,240 in Wonil Special Steel on October 25, 2024 and sell it today you would earn a total of 24,760 from holding Wonil Special Steel or generate 3.52% 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. Kolon Plastics
Performance |
| Timeline |
| Wonil Special Steel |
| Kolon Plastics |
Wonil Special and Kolon Plastics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonil Special and Kolon Plastics
The main advantage of trading using opposite Wonil Special and Kolon Plastics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonil Special position performs unexpectedly, Kolon Plastics 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 Kolon Plastics will offset losses from the drop in Kolon Plastics' long position.| Wonil Special vs. Display Tech Co | Wonil Special vs. Sungmoon Electronics Co | Wonil Special vs. Echomarketing CoLtd | Wonil Special vs. Iljin Display |
| Kolon Plastics vs. Atinum Investment Co | Kolon Plastics vs. Korea Investment Holdings | Kolon Plastics vs. DB Financial Investment | Kolon Plastics vs. SV Investment |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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