Correlation Between Korea Real and Wonik QnC
Can any of the company-specific risk be diversified away by investing in both Korea Real and Wonik QnC 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 Korea Real and Wonik QnC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Real Estate and Wonik QnC, you can compare the effects of market volatilities on Korea Real and Wonik QnC 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 Korea Real with a short position of Wonik QnC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Real and Wonik QnC.
Diversification Opportunities for Korea Real and Wonik QnC
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Korea and Wonik is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Korea Real Estate and Wonik QnC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonik QnC and Korea Real 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 Korea Real Estate are associated (or correlated) with Wonik QnC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonik QnC has no effect on the direction of Korea Real i.e., Korea Real and Wonik QnC go up and down completely randomly.
Pair Corralation between Korea Real and Wonik QnC
Assuming the 90 days trading horizon Korea Real Estate is expected to generate 0.23 times more return on investment than Wonik QnC. However, Korea Real Estate is 4.26 times less risky than Wonik QnC. It trades about -0.12 of its potential returns per unit of risk. Wonik QnC is currently generating about -0.38 per unit of risk. If you would invest 104,300 in Korea Real Estate on September 1, 2024 and sell it today you would lose (1,900) from holding Korea Real Estate or give up 1.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Korea Real Estate vs. Wonik QnC
Performance |
| Timeline |
| Korea Real Estate |
| Wonik QnC |
Korea Real and Wonik QnC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Real and Wonik QnC
The main advantage of trading using opposite Korea Real and Wonik QnC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Real position performs unexpectedly, Wonik QnC 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 Wonik QnC will offset losses from the drop in Wonik QnC's long position.| Korea Real vs. DataSolution | Korea Real vs. CJ Seafood Corp | Korea Real vs. Shinsegae Information Communication | Korea Real vs. Sungdo Engineering Construction |
| Wonik QnC vs. Dongsin Engineering Construction | Wonik QnC vs. Doosan Fuel Cell | Wonik QnC vs. Daishin Balance 1 | Wonik QnC vs. Total Soft Bank |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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