Correlation Between KT Hitel and Woori Technology
Can any of the company-specific risk be diversified away by investing in both KT Hitel and Woori Technology 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 KT Hitel and Woori Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KT Hitel and Woori Technology Investment, you can compare the effects of market volatilities on KT Hitel and Woori Technology 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 KT Hitel with a short position of Woori Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of KT Hitel and Woori Technology.
Diversification Opportunities for KT Hitel and Woori Technology
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 036030 and Woori is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding KT Hitel and Woori Technology Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Technology Inv and KT Hitel 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 KT Hitel are associated (or correlated) with Woori Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woori Technology Inv has no effect on the direction of KT Hitel i.e., KT Hitel and Woori Technology go up and down completely randomly.
Pair Corralation between KT Hitel and Woori Technology
Assuming the 90 days trading horizon KT Hitel is expected to under-perform the Woori Technology. But the stock apears to be less risky and, when comparing its historical volatility, KT Hitel is 1.61 times less risky than Woori Technology. The stock trades about -0.02 of its potential returns per unit of risk. The Woori Technology Investment is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 421,000 in Woori Technology Investment on September 2, 2024 and sell it today you would earn a total of 457,000 from holding Woori Technology Investment or generate 108.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KT Hitel vs. Woori Technology Investment
Performance |
| Timeline |
| KT Hitel |
| Woori Technology Inv |
KT Hitel and Woori Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KT Hitel and Woori Technology
The main advantage of trading using opposite KT Hitel and Woori Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KT Hitel position performs unexpectedly, Woori Technology 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 Woori Technology will offset losses from the drop in Woori Technology's long position.| KT Hitel vs. Samsung Electronics Co | KT Hitel vs. Samsung Electronics Co | KT Hitel vs. LG Energy Solution | KT Hitel vs. SK Hynix |
| Woori Technology vs. Samsung Electronics Co | Woori Technology vs. Samsung Electronics Co | Woori Technology vs. KB Financial Group | Woori Technology vs. Shinhan Financial Group |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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