Correlation Between Wonil Special and Foodnamoo
Can any of the company-specific risk be diversified away by investing in both Wonil Special and Foodnamoo 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 Foodnamoo 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 Foodnamoo, you can compare the effects of market volatilities on Wonil Special and Foodnamoo 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 Foodnamoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonil Special and Foodnamoo.
Diversification Opportunities for Wonil Special and Foodnamoo
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Wonil and Foodnamoo is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Wonil Special Steel and Foodnamoo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foodnamoo 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 Foodnamoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foodnamoo has no effect on the direction of Wonil Special i.e., Wonil Special and Foodnamoo go up and down completely randomly.
Pair Corralation between Wonil Special and Foodnamoo
Assuming the 90 days trading horizon Wonil Special Steel is expected to generate 0.39 times more return on investment than Foodnamoo. However, Wonil Special Steel is 2.59 times less risky than Foodnamoo. It trades about 0.24 of its potential returns per unit of risk. Foodnamoo is currently generating about -0.35 per unit of risk. If you would invest 694,510 in Wonil Special Steel on October 18, 2024 and sell it today you would earn a total of 25,490 from holding Wonil Special Steel or generate 3.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wonil Special Steel vs. Foodnamoo
Performance |
| Timeline |
| Wonil Special Steel |
| Foodnamoo |
Wonil Special and Foodnamoo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonil Special and Foodnamoo
The main advantage of trading using opposite Wonil Special and Foodnamoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonil Special position performs unexpectedly, Foodnamoo 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 Foodnamoo will offset losses from the drop in Foodnamoo's long position.| Wonil Special vs. LG Chemicals | Wonil Special vs. POSCO Holdings | Wonil Special vs. Lotte Chemical Corp | Wonil Special vs. Hyundai Steel |
| Foodnamoo vs. Infinitt Healthcare Co | Foodnamoo vs. J Steel Co | Foodnamoo vs. Wonil Special Steel | Foodnamoo vs. INSUN Environmental New |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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