Correlation Between FarmStory and Wonik Ips
Can any of the company-specific risk be diversified away by investing in both FarmStory and Wonik Ips 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 FarmStory and Wonik Ips into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FarmStory Co and Wonik Ips Co, you can compare the effects of market volatilities on FarmStory and Wonik Ips 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 FarmStory with a short position of Wonik Ips. Check out your portfolio center. Please also check ongoing floating volatility patterns of FarmStory and Wonik Ips.
Diversification Opportunities for FarmStory and Wonik Ips
Very weak diversification
The 3 months correlation between FarmStory and Wonik is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding FarmStory Co and Wonik Ips Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonik Ips and FarmStory 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 FarmStory Co are associated (or correlated) with Wonik Ips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonik Ips has no effect on the direction of FarmStory i.e., FarmStory and Wonik Ips go up and down completely randomly.
Pair Corralation between FarmStory and Wonik Ips
Assuming the 90 days trading horizon FarmStory Co is expected to generate 0.68 times more return on investment than Wonik Ips. However, FarmStory Co is 1.48 times less risky than Wonik Ips. It trades about -0.01 of its potential returns per unit of risk. Wonik Ips Co is currently generating about -0.28 per unit of risk. If you would invest 123,500 in FarmStory Co on January 22, 2025 and sell it today you would lose (900.00) from holding FarmStory Co or give up 0.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FarmStory Co vs. Wonik Ips Co
Performance |
| Timeline |
| FarmStory |
| Wonik Ips |
FarmStory and Wonik Ips Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FarmStory and Wonik Ips
The main advantage of trading using opposite FarmStory and Wonik Ips positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FarmStory position performs unexpectedly, Wonik Ips 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 Wonik Ips will offset losses from the drop in Wonik Ips' long position.| FarmStory vs. People Technology | FarmStory vs. Iljin Display | FarmStory vs. Display Tech Co | FarmStory vs. IC Technology Co |
| Wonik Ips vs. Korean Drug Co | Wonik Ips vs. Cheryong Industrial CoLtd | Wonik Ips vs. Solution Advanced Technology | Wonik Ips vs. Busan Industrial 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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