Correlation Between Woori Technology and Moadata
Can any of the company-specific risk be diversified away by investing in both Woori Technology and Moadata 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 Moadata into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woori Technology and Moadata Co, you can compare the effects of market volatilities on Woori Technology and Moadata 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 Moadata. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Moadata.
Diversification Opportunities for Woori Technology and Moadata
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Woori and Moadata is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology and Moadata Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moadata 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 Moadata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moadata has no effect on the direction of Woori Technology i.e., Woori Technology and Moadata go up and down completely randomly.
Pair Corralation between Woori Technology and Moadata
Assuming the 90 days trading horizon Woori Technology is expected to generate 1.04 times more return on investment than Moadata. However, Woori Technology is 1.04 times more volatile than Moadata Co. It trades about 0.0 of its potential returns per unit of risk. Moadata Co is currently generating about -0.01 per unit of risk. If you would invest 228,500 in Woori Technology on November 2, 2024 and sell it today you would lose (13,000) from holding Woori Technology or give up 5.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Technology vs. Moadata Co
Performance |
| Timeline |
| Woori Technology |
| Moadata |
Woori Technology and Moadata Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Moadata
The main advantage of trading using opposite Woori Technology and Moadata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, Moadata 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 Moadata will offset losses from the drop in Moadata's long position.| Woori Technology vs. DataSolution | Woori Technology vs. PJ Metal Co | Woori Technology vs. Formetal Co | Woori Technology vs. Jeong Moon Information |
| Moadata vs. Dongbang Ship Machinery | Moadata vs. Hanil Chemical Ind | Moadata vs. Kg Chemical | Moadata vs. Dongnam Chemical 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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