Correlation Between Stic Investments and Woori Technology
Can any of the company-specific risk be diversified away by investing in both Stic Investments and Woori Technology 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 Stic Investments and Woori Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stic Investments and Woori Technology Investment, you can compare the effects of market volatilities on Stic Investments and Woori Technology 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 Stic Investments with a short position of Woori Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stic Investments and Woori Technology.
Diversification Opportunities for Stic Investments and Woori Technology
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Stic and Woori is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Stic Investments and Woori Technology Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Technology Inv and Stic Investments 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 Stic Investments are associated (or correlated) with Woori Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woori Technology Inv has no effect on the direction of Stic Investments i.e., Stic Investments and Woori Technology go up and down completely randomly.
Pair Corralation between Stic Investments and Woori Technology
Assuming the 90 days trading horizon Stic Investments is expected to under-perform the Woori Technology. But the stock apears to be less risky and, when comparing its historical volatility, Stic Investments is 2.97 times less risky than Woori Technology. The stock trades about -0.03 of its potential returns per unit of risk. The Woori Technology Investment is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 828,000 in Woori Technology Investment on August 28, 2024 and sell it today you would earn a total of 122,000 from holding Woori Technology Investment or generate 14.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stic Investments vs. Woori Technology Investment
Performance |
| Timeline |
| Stic Investments |
| Woori Technology Inv |
Stic Investments and Woori Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stic Investments and Woori Technology
The main advantage of trading using opposite Stic Investments and Woori Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stic Investments position performs unexpectedly, Woori Technology 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 Woori Technology will offset losses from the drop in Woori Technology's long position.| Stic Investments vs. Korea Real Estate | Stic Investments vs. Korea Ratings Co | Stic Investments vs. IQuest Co | Stic Investments vs. Wonbang Tech Co |
| Woori Technology vs. Humasis Co | Woori Technology vs. JUSUNG ENGINEERING Co | Woori Technology vs. Winix Inc | Woori Technology vs. AfreecaTV 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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