Correlation Between Woori Technology and Jeong Moon
Can any of the company-specific risk be diversified away by investing in both Woori Technology and Jeong Moon 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 Jeong Moon 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 Jeong Moon Information, you can compare the effects of market volatilities on Woori Technology and Jeong Moon 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 Jeong Moon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Jeong Moon.
Diversification Opportunities for Woori Technology and Jeong Moon
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Woori and Jeong is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology Investment and Jeong Moon Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeong Moon 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 Jeong Moon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeong Moon Information has no effect on the direction of Woori Technology i.e., Woori Technology and Jeong Moon go up and down completely randomly.
Pair Corralation between Woori Technology and Jeong Moon
Assuming the 90 days trading horizon Woori Technology Investment is expected to under-perform the Jeong Moon. In addition to that, Woori Technology is 1.11 times more volatile than Jeong Moon Information. It trades about -0.17 of its total potential returns per unit of risk. Jeong Moon Information is currently generating about -0.11 per unit of volatility. If you would invest 86,400 in Jeong Moon Information on December 8, 2024 and sell it today you would lose (3,200) from holding Jeong Moon Information or give up 3.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Technology Investment vs. Jeong Moon Information
Performance |
| Timeline |
| Woori Technology Inv |
| Jeong Moon Information |
Woori Technology and Jeong Moon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Jeong Moon
The main advantage of trading using opposite Woori Technology and Jeong Moon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, Jeong Moon 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 Jeong Moon will offset losses from the drop in Jeong Moon's long position.| Woori Technology vs. Humasis Co | ||
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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