Correlation Between Daol Investment and Woori Technology
Can any of the company-specific risk be diversified away by investing in both Daol Investment 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 Daol Investment and Woori Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daol Investment Securities and Woori Technology Investment, you can compare the effects of market volatilities on Daol Investment 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 Daol Investment with a short position of Woori Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daol Investment and Woori Technology.
Diversification Opportunities for Daol Investment and Woori Technology
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Daol and Woori is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Daol Investment Securities 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 Daol Investment 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 Daol Investment Securities 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 Daol Investment i.e., Daol Investment and Woori Technology go up and down completely randomly.
Pair Corralation between Daol Investment and Woori Technology
Assuming the 90 days trading horizon Daol Investment Securities is expected to under-perform the Woori Technology. But the stock apears to be less risky and, when comparing its historical volatility, Daol Investment Securities is 3.8 times less risky than Woori Technology. The stock trades about -0.17 of its potential returns per unit of risk. The Woori Technology Investment is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 828,000 in Woori Technology Investment on August 29, 2024 and sell it today you would earn a total of 100,000 from holding Woori Technology Investment or generate 12.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daol Investment Securities vs. Woori Technology Investment
Performance |
| Timeline |
| Daol Investment Secu |
| Woori Technology Inv |
Daol Investment and Woori Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daol Investment and Woori Technology
The main advantage of trading using opposite Daol Investment and Woori Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daol Investment 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.| Daol Investment vs. Samsung Electronics Co | Daol Investment vs. Samsung Electronics Co | Daol Investment vs. LG Energy Solution | Daol Investment vs. SK Hynix |
| Woori Technology vs. Korea New Network | Woori Technology vs. Dong A Eltek | Woori Technology vs. Dreamus Company | Woori Technology vs. SK Bioscience 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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