Correlation Between Woori Technology and Korea Refract
Can any of the company-specific risk be diversified away by investing in both Woori Technology and Korea Refract 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 Korea Refract 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 Korea Refract, you can compare the effects of market volatilities on Woori Technology and Korea Refract 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 Korea Refract. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Korea Refract.
Diversification Opportunities for Woori Technology and Korea Refract
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Korea is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology Investment and Korea Refract in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Refract 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 Korea Refract. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Refract has no effect on the direction of Woori Technology i.e., Woori Technology and Korea Refract go up and down completely randomly.
Pair Corralation between Woori Technology and Korea Refract
Assuming the 90 days trading horizon Woori Technology Investment is expected to generate 1.65 times more return on investment than Korea Refract. However, Woori Technology is 1.65 times more volatile than Korea Refract. It trades about 0.05 of its potential returns per unit of risk. Korea Refract is currently generating about -0.01 per unit of risk. If you would invest 421,000 in Woori Technology Investment on September 1, 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Technology Investment vs. Korea Refract
Performance |
| Timeline |
| Woori Technology Inv |
| Korea Refract |
Woori Technology and Korea Refract Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Korea Refract
The main advantage of trading using opposite Woori Technology and Korea Refract positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, Korea Refract 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 Korea Refract will offset losses from the drop in Korea Refract's long position.| Woori Technology vs. Samsung Electronics Co | Woori Technology vs. Samsung Electronics Co | Woori Technology vs. KB Financial Group | Woori Technology vs. Shinhan Financial Group |
| Korea Refract vs. GS Retail Co | Korea Refract vs. Kukdo Chemical Co | Korea Refract vs. Korea Investment Holdings | Korea Refract vs. Sung Bo Chemicals |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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