Correlation Between Korea Information and Woorim Machinery
Can any of the company-specific risk be diversified away by investing in both Korea Information and Woorim Machinery 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 Korea Information and Woorim Machinery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Information Communications and Woorim Machinery Co, you can compare the effects of market volatilities on Korea Information and Woorim Machinery 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 Korea Information with a short position of Woorim Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Information and Woorim Machinery.
Diversification Opportunities for Korea Information and Woorim Machinery
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Korea and Woorim is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Korea Information Communicatio and Woorim Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woorim Machinery and Korea Information 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 Korea Information Communications are associated (or correlated) with Woorim Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woorim Machinery has no effect on the direction of Korea Information i.e., Korea Information and Woorim Machinery go up and down completely randomly.
Pair Corralation between Korea Information and Woorim Machinery
Assuming the 90 days trading horizon Korea Information is expected to generate 2.69 times less return on investment than Woorim Machinery. But when comparing it to its historical volatility, Korea Information Communications is 3.88 times less risky than Woorim Machinery. It trades about 0.23 of its potential returns per unit of risk. Woorim Machinery Co is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 482,000 in Woorim Machinery Co on October 15, 2024 and sell it today you would earn a total of 45,000 from holding Woorim Machinery Co or generate 9.34% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Korea Information Communicatio vs. Woorim Machinery Co
Performance |
Timeline |
Korea Information |
Woorim Machinery |
Korea Information and Woorim Machinery Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Korea Information and Woorim Machinery
The main advantage of trading using opposite Korea Information and Woorim Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Information position performs unexpectedly, Woorim Machinery 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 Woorim Machinery will offset losses from the drop in Woorim Machinery's long position.Korea Information vs. Lee Ku Industrial | Korea Information vs. Infinitt Healthcare Co | Korea Information vs. LEENO Industrial | Korea Information vs. Osang Healthcare Co,Ltd |
Woorim Machinery vs. Nice Information Telecommunication | Woorim Machinery vs. NewFlex Technology Co | Woorim Machinery vs. Alton Sports CoLtd | Woorim Machinery vs. HB Technology TD |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |