Correlation Between Woori Technology and NewFlex Technology
Can any of the company-specific risk be diversified away by investing in both Woori Technology and NewFlex Technology 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 NewFlex Technology 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 NewFlex Technology Co, you can compare the effects of market volatilities on Woori Technology and NewFlex Technology 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 NewFlex Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and NewFlex Technology.
Diversification Opportunities for Woori Technology and NewFlex Technology
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and NewFlex is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology Investment and NewFlex Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewFlex Technology 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 NewFlex Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewFlex Technology has no effect on the direction of Woori Technology i.e., Woori Technology and NewFlex Technology go up and down completely randomly.
Pair Corralation between Woori Technology and NewFlex Technology
Assuming the 90 days trading horizon Woori Technology Investment is expected to generate 1.6 times more return on investment than NewFlex Technology. However, Woori Technology is 1.6 times more volatile than NewFlex Technology Co. It trades about 0.15 of its potential returns per unit of risk. NewFlex Technology Co is currently generating about -0.27 per unit of risk. If you would invest 739,000 in Woori Technology Investment on August 28, 2024 and sell it today you would earn a total of 189,000 from holding Woori Technology Investment or generate 25.58% 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. NewFlex Technology Co
Performance |
| Timeline |
| Woori Technology Inv |
| NewFlex Technology |
Woori Technology and NewFlex Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and NewFlex Technology
The main advantage of trading using opposite Woori Technology and NewFlex Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, NewFlex Technology 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 NewFlex Technology will offset losses from the drop in NewFlex Technology's long position.| Woori Technology vs. Korea New Network | Woori Technology vs. Dong A Eltek | Woori Technology vs. Dreamus Company | Woori Technology vs. SK Bioscience Co |
| NewFlex Technology vs. Hanwha InvestmentSecurities Co | NewFlex Technology vs. SBI Investment KOREA | NewFlex Technology vs. Samyung Trading Co | NewFlex Technology vs. Korea Air Svc |
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 Stocks Directory module to find actively traded stocks across global markets.
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