Correlation Between Woori Technology and Kaonmedia
Can any of the company-specific risk be diversified away by investing in both Woori Technology and Kaonmedia 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 Kaonmedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woori Technology and Kaonmedia Co, you can compare the effects of market volatilities on Woori Technology and Kaonmedia 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 Kaonmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Kaonmedia.
Diversification Opportunities for Woori Technology and Kaonmedia
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Kaonmedia is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology and Kaonmedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaonmedia 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 Kaonmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaonmedia has no effect on the direction of Woori Technology i.e., Woori Technology and Kaonmedia go up and down completely randomly.
Pair Corralation between Woori Technology and Kaonmedia
Assuming the 90 days trading horizon Woori Technology is expected to generate 0.84 times more return on investment than Kaonmedia. However, Woori Technology is 1.19 times less risky than Kaonmedia. It trades about 0.01 of its potential returns per unit of risk. Kaonmedia Co is currently generating about -0.04 per unit of risk. If you would invest 235,000 in Woori Technology on August 29, 2024 and sell it today you would lose (500.00) from holding Woori Technology or give up 0.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Technology vs. Kaonmedia Co
Performance |
| Timeline |
| Woori Technology |
| Kaonmedia |
Woori Technology and Kaonmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Kaonmedia
The main advantage of trading using opposite Woori Technology and Kaonmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, Kaonmedia 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 Kaonmedia will offset losses from the drop in Kaonmedia'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 |
| Kaonmedia vs. Ssangyong Materials Corp | Kaonmedia vs. Polaris Office Corp | Kaonmedia vs. Automobile Pc | Kaonmedia vs. Korean Air Lines |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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