Correlation Between Daou Data and Woori Technology
Can any of the company-specific risk be diversified away by investing in both Daou Data 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 Daou Data and Woori Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daou Data Corp and Woori Technology, you can compare the effects of market volatilities on Daou Data 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 Daou Data with a short position of Woori Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daou Data and Woori Technology.
Diversification Opportunities for Daou Data and Woori Technology
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Daou and Woori is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Daou Data Corp and Woori Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Technology and Daou Data 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 Daou Data Corp 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 has no effect on the direction of Daou Data i.e., Daou Data and Woori Technology go up and down completely randomly.
Pair Corralation between Daou Data and Woori Technology
Assuming the 90 days trading horizon Daou Data Corp is expected to under-perform the Woori Technology. But the stock apears to be less risky and, when comparing its historical volatility, Daou Data Corp is 1.21 times less risky than Woori Technology. The stock trades about -0.09 of its potential returns per unit of risk. The Woori Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 139,600 in Woori Technology on September 1, 2024 and sell it today you would earn a total of 82,900 from holding Woori Technology or generate 59.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daou Data Corp vs. Woori Technology
Performance |
| Timeline |
| Daou Data Corp |
| Woori Technology |
Daou Data and Woori Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daou Data and Woori Technology
The main advantage of trading using opposite Daou Data and Woori Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daou Data 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.| Daou Data vs. Dongjin Semichem Co | Daou Data vs. AhnLab Inc | Daou Data vs. Posco ICT | Daou Data vs. CJ ENM |
| Woori Technology vs. Dongsin Engineering Construction | Woori Technology vs. Doosan Fuel Cell | Woori Technology vs. Daishin Balance 1 | Woori Technology vs. Total Soft Bank |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |