Correlation Between Woori Technology and Alton Sports
Can any of the company-specific risk be diversified away by investing in both Woori Technology and Alton Sports 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 Alton Sports 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 Alton Sports CoLtd, you can compare the effects of market volatilities on Woori Technology and Alton Sports 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 Alton Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Alton Sports.
Diversification Opportunities for Woori Technology and Alton Sports
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Alton is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology Investment and Alton Sports CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alton Sports CoLtd 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 Alton Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alton Sports CoLtd has no effect on the direction of Woori Technology i.e., Woori Technology and Alton Sports go up and down completely randomly.
Pair Corralation between Woori Technology and Alton Sports
Assuming the 90 days trading horizon Woori Technology Investment is expected to generate 2.12 times more return on investment than Alton Sports. However, Woori Technology is 2.12 times more volatile than Alton Sports CoLtd. It trades about -0.01 of its potential returns per unit of risk. Alton Sports CoLtd is currently generating about -0.09 per unit of risk. If you would invest 823,000 in Woori Technology Investment on September 27, 2024 and sell it today you would lose (126,000) from holding Woori Technology Investment or give up 15.31% 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. Alton Sports CoLtd
Performance |
| Timeline |
| Woori Technology Inv |
| Alton Sports CoLtd |
Woori Technology and Alton Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Alton Sports
The main advantage of trading using opposite Woori Technology and Alton Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, Alton Sports 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 Alton Sports will offset losses from the drop in Alton Sports' 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 |
| Alton Sports vs. Dongil Metal Co | Alton Sports vs. Eagle Veterinary Technology | Alton Sports vs. Woori Technology | Alton Sports vs. V One Tech Co |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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