Correlation Between Woori Technology and Samsung Fire
Can any of the company-specific risk be diversified away by investing in both Woori Technology and Samsung Fire 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 Woori Technology and Samsung Fire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woori Technology and Samsung Fire Marine, you can compare the effects of market volatilities on Woori Technology and Samsung Fire 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 Woori Technology with a short position of Samsung Fire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Samsung Fire.
Diversification Opportunities for Woori Technology and Samsung Fire
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Samsung is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology and Samsung Fire Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Fire Marine and Woori Technology 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 Woori Technology are associated (or correlated) with Samsung Fire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Fire Marine has no effect on the direction of Woori Technology i.e., Woori Technology and Samsung Fire go up and down completely randomly.
Pair Corralation between Woori Technology and Samsung Fire
Assuming the 90 days trading horizon Woori Technology is expected to generate 0.75 times more return on investment than Samsung Fire. However, Woori Technology is 1.33 times less risky than Samsung Fire. It trades about 0.27 of its potential returns per unit of risk. Samsung Fire Marine is currently generating about 0.03 per unit of risk. If you would invest 177,800 in Woori Technology on November 8, 2024 and sell it today you would earn a total of 24,700 from holding Woori Technology or generate 13.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 84.21% |
| Values | Daily Returns |
Woori Technology vs. Samsung Fire Marine
Performance |
| Timeline |
| Woori Technology |
| Samsung Fire Marine |
Woori Technology and Samsung Fire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Samsung Fire
The main advantage of trading using opposite Woori Technology and Samsung Fire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, Samsung Fire 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 Samsung Fire will offset losses from the drop in Samsung Fire's long position.| Woori Technology vs. Samsung Electronics Co | Woori Technology vs. Samsung Electronics Co | Woori Technology vs. Hyundai Motor Co | Woori Technology vs. Hyundai Motor |
| Samsung Fire vs. DB Insurance Co | Samsung Fire vs. Korean Drug Co | Samsung Fire vs. Kisan Telecom Co | Samsung Fire vs. Samsung Life Insurance |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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