Correlation Between Woori Technology and Orbitech
Can any of the company-specific risk be diversified away by investing in both Woori Technology and Orbitech 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 Orbitech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woori Technology and Orbitech Co, you can compare the effects of market volatilities on Woori Technology and Orbitech 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 Orbitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Orbitech.
Diversification Opportunities for Woori Technology and Orbitech
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Woori and Orbitech is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology and Orbitech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orbitech 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 Orbitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orbitech has no effect on the direction of Woori Technology i.e., Woori Technology and Orbitech go up and down completely randomly.
Pair Corralation between Woori Technology and Orbitech
Assuming the 90 days trading horizon Woori Technology is expected to generate 2.0 times less return on investment than Orbitech. In addition to that, Woori Technology is 1.13 times more volatile than Orbitech Co. It trades about 0.05 of its total potential returns per unit of risk. Orbitech Co is currently generating about 0.12 per unit of volatility. If you would invest 218,000 in Orbitech Co on September 1, 2024 and sell it today you would earn a total of 13,500 from holding Orbitech Co or generate 6.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Technology vs. Orbitech Co
Performance |
| Timeline |
| Woori Technology |
| Orbitech |
Woori Technology and Orbitech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Orbitech
The main advantage of trading using opposite Woori Technology and Orbitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, Orbitech 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 Orbitech will offset losses from the drop in Orbitech's long position.| Woori Technology vs. Dongsin Engineering Construction | Woori Technology vs. Doosan Fuel Cell | Woori Technology vs. Daishin Balance 1 | Woori Technology vs. Total Soft Bank |
| Orbitech vs. Korea New Network | Orbitech vs. ICD Co | Orbitech vs. DYPNF CoLtd | Orbitech vs. Busan Industrial 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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