Correlation Between Woori Technology and Iljin HySolus
Can any of the company-specific risk be diversified away by investing in both Woori Technology and Iljin HySolus 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 Iljin HySolus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woori Technology and Iljin HySolus Co, you can compare the effects of market volatilities on Woori Technology and Iljin HySolus 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 Iljin HySolus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Iljin HySolus.
Diversification Opportunities for Woori Technology and Iljin HySolus
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Woori and Iljin is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology and Iljin HySolus Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iljin HySolus 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 Iljin HySolus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iljin HySolus has no effect on the direction of Woori Technology i.e., Woori Technology and Iljin HySolus go up and down completely randomly.
Pair Corralation between Woori Technology and Iljin HySolus
Assuming the 90 days trading horizon Woori Technology is expected to generate 1.58 times more return on investment than Iljin HySolus. However, Woori Technology is 1.58 times more volatile than Iljin HySolus Co. It trades about 0.03 of its potential returns per unit of risk. Iljin HySolus Co is currently generating about -0.04 per unit of risk. If you would invest 135,500 in Woori Technology on September 12, 2024 and sell it today you would earn a total of 30,600 from holding Woori Technology or generate 22.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Woori Technology vs. Iljin HySolus Co
Performance |
| Timeline |
| Woori Technology |
| Iljin HySolus |
Woori Technology and Iljin HySolus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Iljin HySolus
The main advantage of trading using opposite Woori Technology and Iljin HySolus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, Iljin HySolus 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 Iljin HySolus will offset losses from the drop in Iljin HySolus' long position.| Woori Technology vs. Cube Entertainment | Woori Technology vs. Dreamus Company | Woori Technology vs. LG Energy Solution | Woori Technology vs. Dongwon System |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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