Correlation Between Woori Technology and Netmarble Games
Can any of the company-specific risk be diversified away by investing in both Woori Technology and Netmarble Games 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 Netmarble Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woori Technology and Netmarble Games Corp, you can compare the effects of market volatilities on Woori Technology and Netmarble Games 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 Netmarble Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Netmarble Games.
Diversification Opportunities for Woori Technology and Netmarble Games
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Woori and Netmarble is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology and Netmarble Games Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netmarble Games Corp 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 Netmarble Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netmarble Games Corp has no effect on the direction of Woori Technology i.e., Woori Technology and Netmarble Games go up and down completely randomly.
Pair Corralation between Woori Technology and Netmarble Games
Assuming the 90 days trading horizon Woori Technology is expected to generate 1.2 times more return on investment than Netmarble Games. However, Woori Technology is 1.2 times more volatile than Netmarble Games Corp. It trades about 0.57 of its potential returns per unit of risk. Netmarble Games Corp is currently generating about -0.4 per unit of risk. If you would invest 168,700 in Woori Technology on November 1, 2024 and sell it today you would earn a total of 46,800 from holding Woori Technology or generate 27.74% 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. Netmarble Games Corp
Performance |
| Timeline |
| Woori Technology |
| Netmarble Games Corp |
Woori Technology and Netmarble Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Netmarble Games
The main advantage of trading using opposite Woori Technology and Netmarble Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, Netmarble Games 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 Netmarble Games will offset losses from the drop in Netmarble Games' long position.| Woori Technology vs. Solution Advanced Technology | Woori Technology vs. ADTechnology CoLtd | Woori Technology vs. Jin Air Co | Woori Technology vs. Seers Technology |
| Netmarble Games vs. KG Eco Technology | Netmarble Games vs. HB Technology TD | Netmarble Games vs. Grand Korea Leisure | Netmarble Games vs. Woori Technology |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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