Correlation Between Woori Technology and RS Automation
Can any of the company-specific risk be diversified away by investing in both Woori Technology and RS Automation 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 RS Automation 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 RS Automation CoLtd, you can compare the effects of market volatilities on Woori Technology and RS Automation 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 RS Automation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and RS Automation.
Diversification Opportunities for Woori Technology and RS Automation
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and 140670 is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology Investment and RS Automation CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RS Automation 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 RS Automation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RS Automation CoLtd has no effect on the direction of Woori Technology i.e., Woori Technology and RS Automation go up and down completely randomly.
Pair Corralation between Woori Technology and RS Automation
Assuming the 90 days trading horizon Woori Technology is expected to generate 4.32 times less return on investment than RS Automation. But when comparing it to its historical volatility, Woori Technology Investment is 2.47 times less risky than RS Automation. It trades about 0.15 of its potential returns per unit of risk. RS Automation CoLtd is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,056,000 in RS Automation CoLtd on October 23, 2024 and sell it today you would earn a total of 400,000 from holding RS Automation CoLtd or generate 37.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Technology Investment vs. RS Automation CoLtd
Performance |
| Timeline |
| Woori Technology Inv |
| RS Automation CoLtd |
Woori Technology and RS Automation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and RS Automation
The main advantage of trading using opposite Woori Technology and RS Automation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, RS Automation 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 RS Automation will offset losses from the drop in RS Automation's long position.| Woori Technology vs. Humasis Co | Woori Technology vs. JUSUNG ENGINEERING Co | Woori Technology vs. Winix Inc | Woori Technology vs. AfreecaTV Co |
| RS Automation vs. Seoyon Topmetal Co | RS Automation vs. MetaLabs Co | RS Automation vs. Korean Reinsurance Co | RS Automation vs. Woori Financial Group |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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