Correlation Between Bookook Steel and Wonil Special
Can any of the company-specific risk be diversified away by investing in both Bookook Steel and Wonil Special 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 Bookook Steel and Wonil Special into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bookook Steel and Wonil Special Steel, you can compare the effects of market volatilities on Bookook Steel and Wonil Special 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 Bookook Steel with a short position of Wonil Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bookook Steel and Wonil Special.
Diversification Opportunities for Bookook Steel and Wonil Special
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bookook and Wonil is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Bookook Steel and Wonil Special Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonil Special Steel and Bookook Steel 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 Bookook Steel are associated (or correlated) with Wonil Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonil Special Steel has no effect on the direction of Bookook Steel i.e., Bookook Steel and Wonil Special go up and down completely randomly.
Pair Corralation between Bookook Steel and Wonil Special
Assuming the 90 days trading horizon Bookook Steel is expected to generate 2.96 times more return on investment than Wonil Special. However, Bookook Steel is 2.96 times more volatile than Wonil Special Steel. It trades about 0.01 of its potential returns per unit of risk. Wonil Special Steel is currently generating about -0.1 per unit of risk. If you would invest 247,000 in Bookook Steel on December 1, 2024 and sell it today you would earn a total of 500.00 from holding Bookook Steel or generate 0.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bookook Steel vs. Wonil Special Steel
Performance |
| Timeline |
| Bookook Steel |
| Wonil Special Steel |
Bookook Steel and Wonil Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bookook Steel and Wonil Special
The main advantage of trading using opposite Bookook Steel and Wonil Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bookook Steel position performs unexpectedly, Wonil Special 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 Wonil Special will offset losses from the drop in Wonil Special's long position.| Bookook Steel vs. Organic Special Pet | Bookook Steel vs. Namyang Dairy | Bookook Steel vs. Daesung Hi Tech Co | Bookook Steel vs. Iljin Display |
| Wonil Special vs. Digital Multimedia Technology | Wonil Special vs. MEDIANA CoLtd | Wonil Special vs. LEENO Industrial | Wonil Special vs. Dongil Metal 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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