Correlation Between Woori Technology and Design
Can any of the company-specific risk be diversified away by investing in both Woori Technology and Design 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 Design 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 Design Co, you can compare the effects of market volatilities on Woori Technology and Design 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 Design. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Design.
Diversification Opportunities for Woori Technology and Design
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Woori and Design is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology Investment and Design Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Design 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 Design. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Design has no effect on the direction of Woori Technology i.e., Woori Technology and Design go up and down completely randomly.
Pair Corralation between Woori Technology and Design
Assuming the 90 days trading horizon Woori Technology Investment is expected to generate 0.8 times more return on investment than Design. However, Woori Technology Investment is 1.25 times less risky than Design. It trades about -0.31 of its potential returns per unit of risk. Design Co is currently generating about -0.32 per unit of risk. If you would invest 1,116,000 in Woori Technology Investment on September 13, 2024 and sell it today you would lose (309,000) from holding Woori Technology Investment or give up 27.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Technology Investment vs. Design Co
Performance |
| Timeline |
| Woori Technology Inv |
| Design |
Woori Technology and Design Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Design
The main advantage of trading using opposite Woori Technology and Design positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, Design 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 Design will offset losses from the drop in Design's long position.| Woori Technology vs. KB Financial Group | Woori Technology vs. Shinhan Financial Group | Woori Technology vs. Hana Financial | Woori Technology vs. Woori Financial Group |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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