Correlation Between Pan Ocean and Woori Technology
Can any of the company-specific risk be diversified away by investing in both Pan Ocean 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 Pan Ocean and Woori Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pan Ocean Co and Woori Technology Investment, you can compare the effects of market volatilities on Pan Ocean 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 Pan Ocean with a short position of Woori Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan Ocean and Woori Technology.
Diversification Opportunities for Pan Ocean and Woori Technology
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pan and Woori is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Pan Ocean Co 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 Pan Ocean 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 Pan Ocean Co 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 Pan Ocean i.e., Pan Ocean and Woori Technology go up and down completely randomly.
Pair Corralation between Pan Ocean and Woori Technology
Assuming the 90 days trading horizon Pan Ocean Co is expected to under-perform the Woori Technology. But the stock apears to be less risky and, when comparing its historical volatility, Pan Ocean Co is 1.85 times less risky than Woori Technology. The stock trades about -0.07 of its potential returns per unit of risk. The Woori Technology Investment is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 927,000 in Woori Technology Investment on September 3, 2024 and sell it today you would lose (49,000) from holding Woori Technology Investment or give up 5.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pan Ocean Co vs. Woori Technology Investment
Performance |
| Timeline |
| Pan Ocean |
| Woori Technology Inv |
Pan Ocean and Woori Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pan Ocean and Woori Technology
The main advantage of trading using opposite Pan Ocean and Woori Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan Ocean 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.| Pan Ocean vs. LG Display | Pan Ocean vs. Hyundai Motor | Pan Ocean vs. Hyundai Motor Co | Pan Ocean vs. Hyundai Motor 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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