Correlation Between Woori Technology and Stic Investments
Can any of the company-specific risk be diversified away by investing in both Woori Technology and Stic Investments 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 Stic Investments 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 Stic Investments, you can compare the effects of market volatilities on Woori Technology and Stic Investments 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 Stic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Stic Investments.
Diversification Opportunities for Woori Technology and Stic Investments
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Woori and Stic is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology Investment and Stic Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stic Investments 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 Stic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stic Investments has no effect on the direction of Woori Technology i.e., Woori Technology and Stic Investments go up and down completely randomly.
Pair Corralation between Woori Technology and Stic Investments
Assuming the 90 days trading horizon Woori Technology Investment is expected to generate 1.96 times more return on investment than Stic Investments. However, Woori Technology is 1.96 times more volatile than Stic Investments. It trades about 0.2 of its potential returns per unit of risk. Stic Investments is currently generating about -0.08 per unit of risk. If you would invest 716,000 in Woori Technology Investment on October 21, 2024 and sell it today you would earn a total of 83,000 from holding Woori Technology Investment or generate 11.59% 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. Stic Investments
Performance |
| Timeline |
| Woori Technology Inv |
| Stic Investments |
Woori Technology and Stic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Stic Investments
The main advantage of trading using opposite Woori Technology and Stic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, Stic Investments 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 Stic Investments will offset losses from the drop in Stic Investments' long position.| Woori Technology vs. Humasis Co | Woori Technology vs. JUSUNG ENGINEERING Co | Woori Technology vs. Winix Inc | Woori Technology vs. AfreecaTV Co |
| Stic Investments vs. KB Financial Group | Stic Investments vs. Industrial Bank | Stic Investments vs. Daejung Chemicals Metals | Stic Investments vs. InfoBank |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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