Correlation Between Woori Technology and SBI Investment
Can any of the company-specific risk be diversified away by investing in both Woori Technology and SBI Investment 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 SBI Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woori Technology and SBI Investment KOREA, you can compare the effects of market volatilities on Woori Technology and SBI Investment 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 SBI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and SBI Investment.
Diversification Opportunities for Woori Technology and SBI Investment
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Woori and SBI is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology and SBI Investment KOREA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Investment KOREA 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 SBI Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Investment KOREA has no effect on the direction of Woori Technology i.e., Woori Technology and SBI Investment go up and down completely randomly.
Pair Corralation between Woori Technology and SBI Investment
Assuming the 90 days trading horizon Woori Technology is expected to generate 20.94 times less return on investment than SBI Investment. But when comparing it to its historical volatility, Woori Technology is 1.81 times less risky than SBI Investment. It trades about 0.02 of its potential returns per unit of risk. SBI Investment KOREA is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 68,900 in SBI Investment KOREA on September 4, 2024 and sell it today you would earn a total of 19,000 from holding SBI Investment KOREA or generate 27.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Technology vs. SBI Investment KOREA
Performance |
| Timeline |
| Woori Technology |
| SBI Investment KOREA |
Woori Technology and SBI Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and SBI Investment
The main advantage of trading using opposite Woori Technology and SBI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, SBI Investment 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 SBI Investment will offset losses from the drop in SBI Investment's long position.| Woori Technology vs. SBI Investment KOREA | Woori Technology vs. Hyosung Advanced Materials | Woori Technology vs. Daejoo Electronic Materials | Woori Technology vs. National Plastic Co |
| SBI Investment vs. Foodnamoo | SBI Investment vs. CJ Seafood Corp | SBI Investment vs. Hyundai Green Food | SBI Investment vs. Playgram 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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