Correlation Between Woori Technology and Mobile Appliance
Can any of the company-specific risk be diversified away by investing in both Woori Technology and Mobile Appliance 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 Mobile Appliance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woori Technology and Mobile Appliance, you can compare the effects of market volatilities on Woori Technology and Mobile Appliance 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 Mobile Appliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Mobile Appliance.
Diversification Opportunities for Woori Technology and Mobile Appliance
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Woori and Mobile is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology and Mobile Appliance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobile Appliance 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 Mobile Appliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobile Appliance has no effect on the direction of Woori Technology i.e., Woori Technology and Mobile Appliance go up and down completely randomly.
Pair Corralation between Woori Technology and Mobile Appliance
Assuming the 90 days trading horizon Woori Technology is expected to generate 1.46 times less return on investment than Mobile Appliance. In addition to that, Woori Technology is 1.26 times more volatile than Mobile Appliance. It trades about 0.17 of its total potential returns per unit of risk. Mobile Appliance is currently generating about 0.32 per unit of volatility. If you would invest 202,000 in Mobile Appliance on October 14, 2024 and sell it today you would earn a total of 22,000 from holding Mobile Appliance or generate 10.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Technology vs. Mobile Appliance
Performance |
| Timeline |
| Woori Technology |
| Mobile Appliance |
Woori Technology and Mobile Appliance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Mobile Appliance
The main advantage of trading using opposite Woori Technology and Mobile Appliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, Mobile Appliance 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 Mobile Appliance will offset losses from the drop in Mobile Appliance's long position.| Woori Technology vs. Daou Data Corp | Woori Technology vs. Daishin Information Communications | Woori Technology vs. Cuckoo Homesys Co | Woori Technology vs. GS Retail Co |
| Mobile Appliance vs. Eagle Veterinary Technology | Mobile Appliance vs. Woori Technology | Mobile Appliance vs. Ilji Technology Co | Mobile Appliance vs. Hana Financial |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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