Correlation Between Woori Technology and BIT Computer
Can any of the company-specific risk be diversified away by investing in both Woori Technology and BIT Computer 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 BIT Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woori Technology and BIT Computer Co, you can compare the effects of market volatilities on Woori Technology and BIT Computer 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 BIT Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and BIT Computer.
Diversification Opportunities for Woori Technology and BIT Computer
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and BIT is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology and BIT Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIT Computer 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 BIT Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIT Computer has no effect on the direction of Woori Technology i.e., Woori Technology and BIT Computer go up and down completely randomly.
Pair Corralation between Woori Technology and BIT Computer
Assuming the 90 days trading horizon Woori Technology is expected to generate 2.1 times more return on investment than BIT Computer. However, Woori Technology is 2.1 times more volatile than BIT Computer Co. It trades about 0.05 of its potential returns per unit of risk. BIT Computer Co is currently generating about -0.07 per unit of risk. If you would invest 224,000 in Woori Technology on August 29, 2024 and sell it today you would earn a total of 10,500 from holding Woori Technology or generate 4.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Technology vs. BIT Computer Co
Performance |
| Timeline |
| Woori Technology |
| BIT Computer |
Woori Technology and BIT Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and BIT Computer
The main advantage of trading using opposite Woori Technology and BIT Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, BIT Computer 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 BIT Computer will offset losses from the drop in BIT Computer's long position.| Woori Technology vs. Daou Data Corp | Woori Technology vs. Busan Industrial Co | Woori Technology vs. Busan Ind | Woori Technology vs. Shinhan WTI Futures |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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