Correlation Between Woori Technology and Daol Investment
Can any of the company-specific risk be diversified away by investing in both Woori Technology and Daol Investment 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 Daol Investment 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 Daol Investment Securities, you can compare the effects of market volatilities on Woori Technology and Daol Investment 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 Daol Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Daol Investment.
Diversification Opportunities for Woori Technology and Daol Investment
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Woori and Daol is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology Investment and Daol Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daol Investment Secu 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 Daol Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daol Investment Secu has no effect on the direction of Woori Technology i.e., Woori Technology and Daol Investment go up and down completely randomly.
Pair Corralation between Woori Technology and Daol Investment
Assuming the 90 days trading horizon Woori Technology Investment is expected to generate 3.8 times more return on investment than Daol Investment. However, Woori Technology is 3.8 times more volatile than Daol Investment Securities. It trades about 0.12 of its potential returns per unit of risk. Daol Investment Securities is currently generating about -0.17 per unit of risk. If you would invest 828,000 in Woori Technology Investment on August 29, 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Technology Investment vs. Daol Investment Securities
Performance |
| Timeline |
| Woori Technology Inv |
| Daol Investment Secu |
Woori Technology and Daol Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Daol Investment
The main advantage of trading using opposite Woori Technology and Daol Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, Daol Investment 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 Daol Investment will offset losses from the drop in Daol Investment'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 |
| Daol Investment vs. Samsung Electronics Co | Daol Investment vs. Samsung Electronics Co | Daol Investment vs. LG Energy Solution | Daol Investment vs. SK Hynix |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |