Correlation Between Woori Technology and Daishin Information
Can any of the company-specific risk be diversified away by investing in both Woori Technology and Daishin Information 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 Daishin Information 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 Daishin Information Communications, you can compare the effects of market volatilities on Woori Technology and Daishin Information 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 Daishin Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Daishin Information.
Diversification Opportunities for Woori Technology and Daishin Information
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Woori and Daishin is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology Investment and Daishin Information Communicat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daishin Information 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 Daishin Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daishin Information has no effect on the direction of Woori Technology i.e., Woori Technology and Daishin Information go up and down completely randomly.
Pair Corralation between Woori Technology and Daishin Information
Assuming the 90 days trading horizon Woori Technology Investment is expected to generate 3.5 times more return on investment than Daishin Information. However, Woori Technology is 3.5 times more volatile than Daishin Information Communications. It trades about 0.12 of its potential returns per unit of risk. Daishin Information Communications is currently generating about -0.02 per unit of risk. If you would invest 828,000 in Woori Technology Investment on August 28, 2024 and sell it today you would earn a total of 100,000 from holding Woori Technology Investment or generate 12.08% 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. Daishin Information Communicat
Performance |
| Timeline |
| Woori Technology Inv |
| Daishin Information |
Woori Technology and Daishin Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Daishin Information
The main advantage of trading using opposite Woori Technology and Daishin Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, Daishin Information 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 Daishin Information will offset losses from the drop in Daishin Information's long position.| Woori Technology vs. Korea New Network | Woori Technology vs. Dong A Eltek | Woori Technology vs. Dreamus Company | Woori Technology vs. SK Bioscience Co |
| Daishin Information vs. LB Investment | Daishin Information vs. DSC Investment | Daishin Information vs. Coloray International Investment | Daishin Information vs. Hanwha InvestmentSecurities Co |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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