Correlation Between Woori Technology and Korea Shipbuilding
Can any of the company-specific risk be diversified away by investing in both Woori Technology and Korea Shipbuilding 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 Korea Shipbuilding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woori Technology and Korea Shipbuilding Offshore, you can compare the effects of market volatilities on Woori Technology and Korea Shipbuilding 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 Korea Shipbuilding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Korea Shipbuilding.
Diversification Opportunities for Woori Technology and Korea Shipbuilding
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Woori and Korea is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology and Korea Shipbuilding Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Shipbuilding 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 Korea Shipbuilding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Shipbuilding has no effect on the direction of Woori Technology i.e., Woori Technology and Korea Shipbuilding go up and down completely randomly.
Pair Corralation between Woori Technology and Korea Shipbuilding
Assuming the 90 days trading horizon Woori Technology is expected to generate 18.94 times less return on investment than Korea Shipbuilding. In addition to that, Woori Technology is 1.08 times more volatile than Korea Shipbuilding Offshore. It trades about 0.01 of its total potential returns per unit of risk. Korea Shipbuilding Offshore is currently generating about 0.22 per unit of volatility. If you would invest 19,050,000 in Korea Shipbuilding Offshore on August 29, 2024 and sell it today you would earn a total of 2,550,000 from holding Korea Shipbuilding Offshore or generate 13.39% 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. Korea Shipbuilding Offshore
Performance |
| Timeline |
| Woori Technology |
| Korea Shipbuilding |
Woori Technology and Korea Shipbuilding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Korea Shipbuilding
The main advantage of trading using opposite Woori Technology and Korea Shipbuilding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, Korea Shipbuilding 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 Korea Shipbuilding will offset losses from the drop in Korea Shipbuilding's long position.| Woori Technology vs. Korea Real Estate | Woori Technology vs. Korea Ratings Co | Woori Technology vs. IQuest Co | Woori Technology vs. Wonbang Tech Co |
| Korea Shipbuilding vs. Samsung Electronics Co | Korea Shipbuilding vs. Samsung Electronics Co | Korea Shipbuilding vs. Hyundai Motor Co | Korea Shipbuilding vs. Hyundai Motor |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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