Correlation Between Woori Technology and ISU Abxis
Can any of the company-specific risk be diversified away by investing in both Woori Technology and ISU Abxis 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 ISU Abxis 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 ISU Abxis Co, you can compare the effects of market volatilities on Woori Technology and ISU Abxis 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 ISU Abxis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and ISU Abxis.
Diversification Opportunities for Woori Technology and ISU Abxis
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Woori and ISU is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology Investment and ISU Abxis Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ISU Abxis 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 ISU Abxis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ISU Abxis has no effect on the direction of Woori Technology i.e., Woori Technology and ISU Abxis go up and down completely randomly.
Pair Corralation between Woori Technology and ISU Abxis
Assuming the 90 days trading horizon Woori Technology Investment is expected to generate 1.95 times more return on investment than ISU Abxis. However, Woori Technology is 1.95 times more volatile than ISU Abxis Co. It trades about 0.05 of its potential returns per unit of risk. ISU Abxis Co is currently generating about -0.03 per unit of risk. If you would invest 668,000 in Woori Technology Investment on September 4, 2024 and sell it today you would earn a total of 286,000 from holding Woori Technology Investment or generate 42.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Technology Investment vs. ISU Abxis Co
Performance |
| Timeline |
| Woori Technology Inv |
| ISU Abxis |
Woori Technology and ISU Abxis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and ISU Abxis
The main advantage of trading using opposite Woori Technology and ISU Abxis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, ISU Abxis 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 ISU Abxis will offset losses from the drop in ISU Abxis' long position.| Woori Technology vs. Dongjin Semichem Co | Woori Technology vs. AhnLab Inc | Woori Technology vs. Posco ICT | Woori Technology vs. CJ ENM |
| ISU Abxis vs. SK Bioscience Co | ISU Abxis vs. MedPacto | ISU Abxis vs. OLIPASS | ISU Abxis vs. OliX PharmaceuticalsInc |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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