Correlation Between Woori Technology and Global Standard
Can any of the company-specific risk be diversified away by investing in both Woori Technology and Global Standard 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 Global Standard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woori Technology and Global Standard Technology, you can compare the effects of market volatilities on Woori Technology and Global Standard 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 Global Standard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Global Standard.
Diversification Opportunities for Woori Technology and Global Standard
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Woori and Global is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology and Global Standard Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Standard Tech 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 Global Standard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Standard Tech has no effect on the direction of Woori Technology i.e., Woori Technology and Global Standard go up and down completely randomly.
Pair Corralation between Woori Technology and Global Standard
Assuming the 90 days trading horizon Woori Technology is expected to generate 0.79 times more return on investment than Global Standard. However, Woori Technology is 1.27 times less risky than Global Standard. It trades about 0.05 of its potential returns per unit of risk. Global Standard Technology is currently generating about -0.1 per unit of risk. If you would invest 217,000 in Woori Technology on September 2, 2024 and sell it today you would earn a total of 5,500 from holding Woori Technology or generate 2.53% 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. Global Standard Technology
Performance |
| Timeline |
| Woori Technology |
| Global Standard Tech |
Woori Technology and Global Standard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Global Standard
The main advantage of trading using opposite Woori Technology and Global Standard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, Global Standard 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 Global Standard will offset losses from the drop in Global Standard'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 |
| Global Standard vs. Dongsin Engineering Construction | Global Standard vs. Doosan Fuel Cell | Global Standard vs. Daishin Balance 1 | Global Standard vs. Total Soft Bank |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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