Correlation Between Woori Technology and KTB Investment
Can any of the company-specific risk be diversified away by investing in both Woori Technology and KTB 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 KTB 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 KTB Investment Securities, you can compare the effects of market volatilities on Woori Technology and KTB 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 KTB Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and KTB Investment.
Diversification Opportunities for Woori Technology and KTB Investment
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Woori and KTB is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology Investment and KTB Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KTB Investment Securities 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 KTB Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KTB Investment Securities has no effect on the direction of Woori Technology i.e., Woori Technology and KTB Investment go up and down completely randomly.
Pair Corralation between Woori Technology and KTB Investment
Assuming the 90 days trading horizon Woori Technology Investment is expected to generate 2.49 times more return on investment than KTB Investment. However, Woori Technology is 2.49 times more volatile than KTB Investment Securities. It trades about 0.07 of its potential returns per unit of risk. KTB Investment Securities is currently generating about -0.03 per unit of risk. If you would invest 393,500 in Woori Technology Investment on September 12, 2024 and sell it today you would earn a total of 417,500 from holding Woori Technology Investment or generate 106.1% 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. KTB Investment Securities
Performance |
| Timeline |
| Woori Technology Inv |
| KTB Investment Securities |
Woori Technology and KTB Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and KTB Investment
The main advantage of trading using opposite Woori Technology and KTB Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, KTB 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 KTB Investment will offset losses from the drop in KTB Investment'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 |
| KTB Investment vs. Samsung Electronics Co | KTB Investment vs. Samsung Electronics Co | KTB Investment vs. SK Hynix | KTB Investment vs. POSCO Holdings |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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