Correlation Between Woori Technology and Korea Investment
Can any of the company-specific risk be diversified away by investing in both Woori Technology and Korea 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 Korea 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 Korea Investment Holdings, you can compare the effects of market volatilities on Woori Technology and Korea 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 Korea Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Korea Investment.
Diversification Opportunities for Woori Technology and Korea Investment
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Woori and Korea is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology Investment and Korea Investment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Investment Holdings 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 Korea Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Investment Holdings has no effect on the direction of Woori Technology i.e., Woori Technology and Korea Investment go up and down completely randomly.
Pair Corralation between Woori Technology and Korea Investment
Assuming the 90 days trading horizon Woori Technology Investment is expected to generate 3.28 times more return on investment than Korea Investment. However, Woori Technology is 3.28 times more volatile than Korea Investment Holdings. It trades about 0.15 of its potential returns per unit of risk. Korea Investment Holdings is currently generating about 0.22 per unit of risk. If you would invest 721,000 in Woori Technology Investment on October 23, 2024 and sell it today you would earn a total of 58,000 from holding Woori Technology Investment or generate 8.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Technology Investment vs. Korea Investment Holdings
Performance |
| Timeline |
| Woori Technology Inv |
| Korea Investment Holdings |
Woori Technology and Korea Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Korea Investment
The main advantage of trading using opposite Woori Technology and Korea Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, Korea 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 Korea Investment will offset losses from the drop in Korea Investment's long position.| Woori Technology vs. Humasis Co | Woori Technology vs. JUSUNG ENGINEERING Co | Woori Technology vs. Winix Inc | Woori Technology vs. AfreecaTV Co |
| Korea Investment vs. Leaders Technology Investment | Korea Investment vs. PLAYWITH | Korea Investment vs. Coloray International Investment | Korea Investment vs. Daol Investment Securities |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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