Correlation Between Woori Technology and Kukdo Chemical
Can any of the company-specific risk be diversified away by investing in both Woori Technology and Kukdo Chemical 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 Kukdo Chemical 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 Kukdo Chemical, you can compare the effects of market volatilities on Woori Technology and Kukdo Chemical 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 Kukdo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Kukdo Chemical.
Diversification Opportunities for Woori Technology and Kukdo Chemical
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Kukdo is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology Investment and Kukdo Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukdo Chemical 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 Kukdo Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukdo Chemical has no effect on the direction of Woori Technology i.e., Woori Technology and Kukdo Chemical go up and down completely randomly.
Pair Corralation between Woori Technology and Kukdo Chemical
Assuming the 90 days trading horizon Woori Technology Investment is expected to generate 2.27 times more return on investment than Kukdo Chemical. However, Woori Technology is 2.27 times more volatile than Kukdo Chemical. It trades about 0.06 of its potential returns per unit of risk. Kukdo Chemical is currently generating about -0.03 per unit of risk. If you would invest 373,500 in Woori Technology Investment on September 14, 2024 and sell it today you would earn a total of 453,500 from holding Woori Technology Investment or generate 121.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Woori Technology Investment vs. Kukdo Chemical
Performance |
| Timeline |
| Woori Technology Inv |
| Kukdo Chemical |
Woori Technology and Kukdo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Kukdo Chemical
The main advantage of trading using opposite Woori Technology and Kukdo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, Kukdo Chemical 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 Kukdo Chemical will offset losses from the drop in Kukdo Chemical's long position.| Woori Technology vs. KB Financial Group | Woori Technology vs. Shinhan Financial Group | Woori Technology vs. Hana Financial | Woori Technology vs. Woori Financial Group |
| Kukdo Chemical vs. EBEST Investment Securities | Kukdo Chemical vs. Woori Technology Investment | Kukdo Chemical vs. WONIK Materials CoLtd | Kukdo Chemical vs. Stic Investments |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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