Correlation Between Woori Technology and Youngsin Metal
Can any of the company-specific risk be diversified away by investing in both Woori Technology and Youngsin Metal 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 Youngsin Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woori Technology Investment and Youngsin Metal Industrial, you can compare the effects of market volatilities on Woori Technology and Youngsin Metal 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 Youngsin Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Youngsin Metal.
Diversification Opportunities for Woori Technology and Youngsin Metal
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Woori and Youngsin is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology Investment and Youngsin Metal Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngsin Metal Industrial 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 Investment are associated (or correlated) with Youngsin Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youngsin Metal Industrial has no effect on the direction of Woori Technology i.e., Woori Technology and Youngsin Metal go up and down completely randomly.
Pair Corralation between Woori Technology and Youngsin Metal
Assuming the 90 days trading horizon Woori Technology Investment is expected to generate 2.04 times more return on investment than Youngsin Metal. However, Woori Technology is 2.04 times more volatile than Youngsin Metal Industrial. It trades about 0.06 of its potential returns per unit of risk. Youngsin Metal Industrial is currently generating about -0.01 per unit of risk. If you would invest 408,000 in Woori Technology Investment on August 29, 2024 and sell it today you would earn a total of 480,000 from holding Woori Technology Investment or generate 117.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Technology Investment vs. Youngsin Metal Industrial
Performance |
| Timeline |
| Woori Technology Inv |
| Youngsin Metal Industrial |
Woori Technology and Youngsin Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Youngsin Metal
The main advantage of trading using opposite Woori Technology and Youngsin Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, Youngsin Metal 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 Youngsin Metal will offset losses from the drop in Youngsin Metal's long position.| Woori Technology vs. Cube Entertainment | Woori Technology vs. Dreamus Company | Woori Technology vs. LG Energy Solution | Woori Technology vs. Dongwon System |
| Youngsin Metal vs. Samsung Electronics Co | Youngsin Metal vs. Samsung Electronics Co | Youngsin Metal vs. KB Financial Group | Youngsin Metal 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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