Correlation Between Woori Technology and Cosmax
Can any of the company-specific risk be diversified away by investing in both Woori Technology and Cosmax 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 Cosmax 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 Cosmax Inc, you can compare the effects of market volatilities on Woori Technology and Cosmax 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 Cosmax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Cosmax.
Diversification Opportunities for Woori Technology and Cosmax
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Woori and Cosmax is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology Investment and Cosmax Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosmax Inc 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 Cosmax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosmax Inc has no effect on the direction of Woori Technology i.e., Woori Technology and Cosmax go up and down completely randomly.
Pair Corralation between Woori Technology and Cosmax
Assuming the 90 days trading horizon Woori Technology Investment is expected to generate 1.09 times more return on investment than Cosmax. However, Woori Technology is 1.09 times more volatile than Cosmax Inc. It trades about 0.02 of its potential returns per unit of risk. Cosmax Inc is currently generating about -0.02 per unit of risk. If you would invest 875,000 in Woori Technology Investment on September 2, 2024 and sell it today you would earn a total of 3,000 from holding Woori Technology Investment or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Technology Investment vs. Cosmax Inc
Performance |
| Timeline |
| Woori Technology Inv |
| Cosmax Inc |
Woori Technology and Cosmax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Cosmax
The main advantage of trading using opposite Woori Technology and Cosmax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, Cosmax 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 Cosmax will offset losses from the drop in Cosmax's long position.| Woori Technology vs. Samsung Electronics Co | Woori Technology vs. Samsung Electronics Co | Woori Technology vs. KB Financial Group | Woori Technology vs. Shinhan Financial Group |
| Cosmax vs. E Investment Development | Cosmax vs. Cuckoo Electronics Co | Cosmax vs. Daeduck Electronics Co | Cosmax 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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