Correlation Between Woori Technology and Nasmedia
Can any of the company-specific risk be diversified away by investing in both Woori Technology and Nasmedia 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 Nasmedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woori Technology and Nasmedia Co, you can compare the effects of market volatilities on Woori Technology and Nasmedia 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 Nasmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Nasmedia.
Diversification Opportunities for Woori Technology and Nasmedia
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Nasmedia is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology and Nasmedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasmedia 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 Nasmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasmedia has no effect on the direction of Woori Technology i.e., Woori Technology and Nasmedia go up and down completely randomly.
Pair Corralation between Woori Technology and Nasmedia
Assuming the 90 days trading horizon Woori Technology is expected to generate 1.66 times more return on investment than Nasmedia. However, Woori Technology is 1.66 times more volatile than Nasmedia Co. It trades about 0.05 of its potential returns per unit of risk. Nasmedia Co is currently generating about -0.04 per unit of risk. If you would invest 145,000 in Woori Technology on August 25, 2024 and sell it today you would earn a total of 92,500 from holding Woori Technology or generate 63.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Technology vs. Nasmedia Co
Performance |
| Timeline |
| Woori Technology |
| Nasmedia |
Woori Technology and Nasmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Nasmedia
The main advantage of trading using opposite Woori Technology and Nasmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, Nasmedia 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 Nasmedia will offset losses from the drop in Nasmedia'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 |
| Nasmedia vs. Shinsegae Information Communication | Nasmedia vs. Korea Information Communications | Nasmedia vs. Wireless Power Amplifier | Nasmedia vs. Pan Entertainment 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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