Correlation Between Wonil Special and Solution Advanced
Can any of the company-specific risk be diversified away by investing in both Wonil Special and Solution 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 Solution 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 Solution Advanced Technology, you can compare the effects of market volatilities on Wonil Special and Solution 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 Solution Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonil Special and Solution Advanced.
Diversification Opportunities for Wonil Special and Solution Advanced
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Wonil and Solution is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Wonil Special Steel and Solution Advanced Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solution Advanced 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 Solution Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solution Advanced has no effect on the direction of Wonil Special i.e., Wonil Special and Solution Advanced go up and down completely randomly.
Pair Corralation between Wonil Special and Solution Advanced
Assuming the 90 days trading horizon Wonil Special Steel is expected to under-perform the Solution Advanced. But the stock apears to be less risky and, when comparing its historical volatility, Wonil Special Steel is 3.42 times less risky than Solution Advanced. The stock trades about -0.05 of its potential returns per unit of risk. The Solution Advanced Technology is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 294,500 in Solution Advanced Technology on November 9, 2024 and sell it today you would lose (15,500) from holding Solution Advanced Technology or give up 5.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wonil Special Steel vs. Solution Advanced Technology
Performance |
| Timeline |
| Wonil Special Steel |
| Solution Advanced |
Wonil Special and Solution Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonil Special and Solution Advanced
The main advantage of trading using opposite Wonil Special and Solution Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonil Special position performs unexpectedly, Solution 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 Solution Advanced will offset losses from the drop in Solution Advanced's long position.| Wonil Special vs. Tae Kyung Chemical | Wonil Special vs. TK Chemical | Wonil Special vs. DSC Investment | Wonil Special vs. Samyung Trading Co |
| Solution Advanced vs. AurosTechnology | Solution Advanced vs. Dongwoon Anatech Co | Solution Advanced vs. RFTech Co | Solution Advanced vs. V One 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |