Correlation Between Woori Technology and Daewoo SBI
Can any of the company-specific risk be diversified away by investing in both Woori Technology and Daewoo SBI 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 Daewoo SBI 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 Daewoo SBI SPAC, you can compare the effects of market volatilities on Woori Technology and Daewoo SBI 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 Daewoo SBI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Daewoo SBI.
Diversification Opportunities for Woori Technology and Daewoo SBI
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Woori and Daewoo is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology Investment and Daewoo SBI SPAC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewoo SBI SPAC 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 Daewoo SBI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewoo SBI SPAC has no effect on the direction of Woori Technology i.e., Woori Technology and Daewoo SBI go up and down completely randomly.
Pair Corralation between Woori Technology and Daewoo SBI
Assuming the 90 days trading horizon Woori Technology Investment is expected to generate 2.62 times more return on investment than Daewoo SBI. However, Woori Technology is 2.62 times more volatile than Daewoo SBI SPAC. It trades about 0.07 of its potential returns per unit of risk. Daewoo SBI SPAC is currently generating about -0.08 per unit of risk. If you would invest 399,000 in Woori Technology Investment on August 28, 2024 and sell it today you would earn a total of 551,000 from holding Woori Technology Investment or generate 138.1% 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. Daewoo SBI SPAC
Performance |
| Timeline |
| Woori Technology Inv |
| Daewoo SBI SPAC |
Woori Technology and Daewoo SBI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Daewoo SBI
The main advantage of trading using opposite Woori Technology and Daewoo SBI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, Daewoo SBI 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 Daewoo SBI will offset losses from the drop in Daewoo SBI'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 |
| Daewoo SBI vs. Deutsch Motors | Daewoo SBI vs. Hanjinkal | Daewoo SBI vs. Busan Industrial Co | Daewoo SBI vs. Busan Ind |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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