Correlation Between Woori Technology and Dongwon System
Can any of the company-specific risk be diversified away by investing in both Woori Technology and Dongwon System 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 Dongwon System 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 Dongwon System, you can compare the effects of market volatilities on Woori Technology and Dongwon System 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 Dongwon System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Dongwon System.
Diversification Opportunities for Woori Technology and Dongwon System
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Woori and Dongwon is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology Investment and Dongwon System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwon System 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 Dongwon System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwon System has no effect on the direction of Woori Technology i.e., Woori Technology and Dongwon System go up and down completely randomly.
Pair Corralation between Woori Technology and Dongwon System
Assuming the 90 days trading horizon Woori Technology Investment is expected to generate 1.61 times more return on investment than Dongwon System. However, Woori Technology is 1.61 times more volatile than Dongwon System. It trades about 0.05 of its potential returns per unit of risk. Dongwon System is currently generating about 0.06 per unit of risk. If you would invest 547,000 in Woori Technology Investment on September 14, 2024 and sell it today you would earn a total of 280,000 from holding Woori Technology Investment or generate 51.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Technology Investment vs. Dongwon System
Performance |
| Timeline |
| Woori Technology Inv |
| Dongwon System |
Woori Technology and Dongwon System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Dongwon System
The main advantage of trading using opposite Woori Technology and Dongwon System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, Dongwon System 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 Dongwon System will offset losses from the drop in Dongwon System'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 |
| Dongwon System vs. DSC Investment | Dongwon System vs. Jeju Air Co | Dongwon System vs. Woori Technology Investment | Dongwon System vs. CU Medical Systems |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |