Correlation Between Woori Technology and Sungdo Engineering
Can any of the company-specific risk be diversified away by investing in both Woori Technology and Sungdo Engineering 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 Sungdo Engineering 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 Sungdo Engineering Construction, you can compare the effects of market volatilities on Woori Technology and Sungdo Engineering 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 Sungdo Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Sungdo Engineering.
Diversification Opportunities for Woori Technology and Sungdo Engineering
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Woori and Sungdo is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology Investment and Sungdo Engineering Constructio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungdo Engineering 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 Sungdo Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sungdo Engineering has no effect on the direction of Woori Technology i.e., Woori Technology and Sungdo Engineering go up and down completely randomly.
Pair Corralation between Woori Technology and Sungdo Engineering
Assuming the 90 days trading horizon Woori Technology Investment is expected to generate 1.29 times more return on investment than Sungdo Engineering. However, Woori Technology is 1.29 times more volatile than Sungdo Engineering Construction. It trades about -0.28 of its potential returns per unit of risk. Sungdo Engineering Construction is currently generating about -0.74 per unit of risk. If you would invest 821,000 in Woori Technology Investment on November 5, 2024 and sell it today you would lose (81,000) from holding Woori Technology Investment or give up 9.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Technology Investment vs. Sungdo Engineering Constructio
Performance |
| Timeline |
| Woori Technology Inv |
| Sungdo Engineering |
Woori Technology and Sungdo Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Sungdo Engineering
The main advantage of trading using opposite Woori Technology and Sungdo Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, Sungdo Engineering 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 Sungdo Engineering will offset losses from the drop in Sungdo Engineering'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 |
| Sungdo Engineering vs. Samsung Card Co | Sungdo Engineering vs. EBEST Investment Securities | Sungdo Engineering vs. Koh Young Technology | Sungdo Engineering vs. Hansol Chemica |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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