Correlation Between Woori Technology and Taekwang Ind
Can any of the company-specific risk be diversified away by investing in both Woori Technology and Taekwang Ind 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 Taekwang Ind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woori Technology and Taekwang Ind, you can compare the effects of market volatilities on Woori Technology and Taekwang Ind 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 Taekwang Ind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Taekwang Ind.
Diversification Opportunities for Woori Technology and Taekwang Ind
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Woori and Taekwang is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology and Taekwang Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taekwang Ind 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 Taekwang Ind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taekwang Ind has no effect on the direction of Woori Technology i.e., Woori Technology and Taekwang Ind go up and down completely randomly.
Pair Corralation between Woori Technology and Taekwang Ind
Assuming the 90 days trading horizon Woori Technology is expected to generate 1.54 times more return on investment than Taekwang Ind. However, Woori Technology is 1.54 times more volatile than Taekwang Ind. It trades about 0.07 of its potential returns per unit of risk. Taekwang Ind is currently generating about 0.01 per unit of risk. If you would invest 130,000 in Woori Technology on September 3, 2024 and sell it today you would earn a total of 90,000 from holding Woori Technology or generate 69.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Technology vs. Taekwang Ind
Performance |
| Timeline |
| Woori Technology |
| Taekwang Ind |
Woori Technology and Taekwang Ind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Taekwang Ind
The main advantage of trading using opposite Woori Technology and Taekwang Ind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, Taekwang Ind 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 Taekwang Ind will offset losses from the drop in Taekwang Ind's long position.| Woori Technology vs. GS Retail Co | Woori Technology vs. Neungyule Education | Woori Technology vs. KMH Hitech Co | Woori Technology vs. Sungchang Autotech Co |
| Taekwang Ind vs. LG Chemicals | Taekwang Ind vs. POSCO Holdings | Taekwang Ind vs. Hanwha Solutions | Taekwang Ind vs. Lotte Chemical Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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