Correlation Between Woori Technology and Raontech
Can any of the company-specific risk be diversified away by investing in both Woori Technology and Raontech 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 Raontech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woori Technology and Raontech, you can compare the effects of market volatilities on Woori Technology and Raontech 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 Raontech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Raontech.
Diversification Opportunities for Woori Technology and Raontech
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Woori and Raontech is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology and Raontech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raontech 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 Raontech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raontech has no effect on the direction of Woori Technology i.e., Woori Technology and Raontech go up and down completely randomly.
Pair Corralation between Woori Technology and Raontech
Assuming the 90 days trading horizon Woori Technology is expected to generate 1.46 times more return on investment than Raontech. However, Woori Technology is 1.46 times more volatile than Raontech. It trades about 0.01 of its potential returns per unit of risk. Raontech is currently generating about -0.15 per unit of risk. If you would invest 240,000 in Woori Technology on September 2, 2024 and sell it today you would lose (17,500) from holding Woori Technology or give up 7.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Technology vs. Raontech
Performance |
| Timeline |
| Woori Technology |
| Raontech |
Woori Technology and Raontech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Raontech
The main advantage of trading using opposite Woori Technology and Raontech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, Raontech 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 Raontech will offset losses from the drop in Raontech's long position.| Woori Technology vs. Dongsin Engineering Construction | Woori Technology vs. Doosan Fuel Cell | Woori Technology vs. Daishin Balance 1 | Woori Technology vs. Total Soft Bank |
| Raontech vs. Samsung Electronics Co | Raontech vs. Samsung Electronics Co | Raontech vs. LG Energy Solution | Raontech vs. SK Hynix |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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