Correlation Between Woori Technology and Korea Information
Can any of the company-specific risk be diversified away by investing in both Woori Technology and Korea Information 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 Information 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 Information Engineering, you can compare the effects of market volatilities on Woori Technology and Korea Information 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 Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Korea Information.
Diversification Opportunities for Woori Technology and Korea Information
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Korea is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology and Korea Information Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information 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 Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of Woori Technology i.e., Woori Technology and Korea Information go up and down completely randomly.
Pair Corralation between Woori Technology and Korea Information
Assuming the 90 days trading horizon Woori Technology is expected to generate 2.03 times more return on investment than Korea Information. However, Woori Technology is 2.03 times more volatile than Korea Information Engineering. It trades about 0.05 of its potential returns per unit of risk. Korea Information Engineering is currently generating about -0.36 per unit of risk. If you would invest 231,500 in Woori Technology on August 25, 2024 and sell it today you would earn a total of 6,000 from holding Woori Technology or generate 2.59% 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. Korea Information Engineering
Performance |
| Timeline |
| Woori Technology |
| Korea Information |
Woori Technology and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Korea Information
The main advantage of trading using opposite Woori Technology and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, Korea Information 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 Information will offset losses from the drop in Korea Information's long position.| Woori Technology vs. Shinsung Delta Tech | Woori Technology vs. Sungchang Autotech Co | Woori Technology vs. DAEDUCK ELECTRONICS CoLtd | Woori Technology vs. PH Tech Co |
| Korea Information vs. DSC Investment | Korea Information vs. Netmarble Games Corp | Korea Information vs. Korea Investment Holdings | Korea Information vs. InnoTherapy |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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