Correlation Between Woori Technology and Jahwa Electron
Can any of the company-specific risk be diversified away by investing in both Woori Technology and Jahwa Electron 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 Jahwa Electron 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 Jahwa Electron, you can compare the effects of market volatilities on Woori Technology and Jahwa Electron 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 Jahwa Electron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Jahwa Electron.
Diversification Opportunities for Woori Technology and Jahwa Electron
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Jahwa is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology Investment and Jahwa Electron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jahwa Electron 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 Jahwa Electron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jahwa Electron has no effect on the direction of Woori Technology i.e., Woori Technology and Jahwa Electron go up and down completely randomly.
Pair Corralation between Woori Technology and Jahwa Electron
Assuming the 90 days trading horizon Woori Technology Investment is expected to generate 1.6 times more return on investment than Jahwa Electron. However, Woori Technology is 1.6 times more volatile than Jahwa Electron. It trades about 0.05 of its potential returns per unit of risk. Jahwa Electron is currently generating about -0.02 per unit of risk. If you would invest 367,500 in Woori Technology Investment on September 23, 2024 and sell it today you would earn a total of 348,500 from holding Woori Technology Investment or generate 94.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Technology Investment vs. Jahwa Electron
Performance |
| Timeline |
| Woori Technology Inv |
| Jahwa Electron |
Woori Technology and Jahwa Electron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Jahwa Electron
The main advantage of trading using opposite Woori Technology and Jahwa Electron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, Jahwa Electron 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 Jahwa Electron will offset losses from the drop in Jahwa Electron's long position.| Woori Technology vs. KB Financial Group | Woori Technology vs. Shinhan Financial Group | Woori Technology vs. Hyundai Motor | Woori Technology vs. Hyundai Motor Co |
| Jahwa Electron vs. BooKook Steel Co | Jahwa Electron vs. InnoTherapy | Jahwa Electron vs. Osang Healthcare Co,Ltd | Jahwa Electron vs. Bookook Steel |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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