Correlation Between Woori Technology and DIGITAL CHOSUN
Can any of the company-specific risk be diversified away by investing in both Woori Technology and DIGITAL CHOSUN 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 DIGITAL CHOSUN 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 DIGITAL CHOSUN, you can compare the effects of market volatilities on Woori Technology and DIGITAL CHOSUN 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 DIGITAL CHOSUN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and DIGITAL CHOSUN.
Diversification Opportunities for Woori Technology and DIGITAL CHOSUN
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Woori and DIGITAL is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology Investment and DIGITAL CHOSUN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIGITAL CHOSUN 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 DIGITAL CHOSUN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIGITAL CHOSUN has no effect on the direction of Woori Technology i.e., Woori Technology and DIGITAL CHOSUN go up and down completely randomly.
Pair Corralation between Woori Technology and DIGITAL CHOSUN
Assuming the 90 days trading horizon Woori Technology Investment is expected to generate 1.47 times more return on investment than DIGITAL CHOSUN. However, Woori Technology is 1.47 times more volatile than DIGITAL CHOSUN. It trades about 0.0 of its potential returns per unit of risk. DIGITAL CHOSUN is currently generating about -0.01 per unit of risk. If you would invest 849,000 in Woori Technology Investment on November 7, 2024 and sell it today you would lose (156,000) from holding Woori Technology Investment or give up 18.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.49% |
| Values | Daily Returns |
Woori Technology Investment vs. DIGITAL CHOSUN
Performance |
| Timeline |
| Woori Technology Inv |
| DIGITAL CHOSUN |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Woori Technology and DIGITAL CHOSUN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and DIGITAL CHOSUN
The main advantage of trading using opposite Woori Technology and DIGITAL CHOSUN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, DIGITAL CHOSUN 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 DIGITAL CHOSUN will offset losses from the drop in DIGITAL CHOSUN's long position.| Woori Technology vs. Humasis Co | Woori Technology vs. JUSUNG ENGINEERING Co | Woori Technology vs. Winix Inc | Woori Technology vs. AfreecaTV Co |
| DIGITAL CHOSUN vs. Sempio Foods Co | DIGITAL CHOSUN vs. Daishin Information Communications | DIGITAL CHOSUN vs. CKH Food Health | DIGITAL CHOSUN vs. Samlip General Foods |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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