Correlation Between Woori Technology and YOUNGHWA TECH
Can any of the company-specific risk be diversified away by investing in both Woori Technology and YOUNGHWA TECH 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 YOUNGHWA TECH 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 YOUNGHWA TECH Co, you can compare the effects of market volatilities on Woori Technology and YOUNGHWA TECH 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 YOUNGHWA TECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and YOUNGHWA TECH.
Diversification Opportunities for Woori Technology and YOUNGHWA TECH
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and YOUNGHWA is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology Investment and YOUNGHWA TECH Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YOUNGHWA TECH 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 YOUNGHWA TECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YOUNGHWA TECH has no effect on the direction of Woori Technology i.e., Woori Technology and YOUNGHWA TECH go up and down completely randomly.
Pair Corralation between Woori Technology and YOUNGHWA TECH
Assuming the 90 days trading horizon Woori Technology Investment is expected to generate 2.13 times more return on investment than YOUNGHWA TECH. However, Woori Technology is 2.13 times more volatile than YOUNGHWA TECH Co. It trades about 0.06 of its potential returns per unit of risk. YOUNGHWA TECH Co is currently generating about -0.02 per unit of risk. If you would invest 414,500 in Woori Technology Investment on September 3, 2024 and sell it today you would earn a total of 463,500 from holding Woori Technology Investment or generate 111.82% 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. YOUNGHWA TECH Co
Performance |
| Timeline |
| Woori Technology Inv |
| YOUNGHWA TECH |
Woori Technology and YOUNGHWA TECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and YOUNGHWA TECH
The main advantage of trading using opposite Woori Technology and YOUNGHWA TECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, YOUNGHWA TECH 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 YOUNGHWA TECH will offset losses from the drop in YOUNGHWA TECH's long position.| Woori Technology vs. Humasis Co | Woori Technology vs. JUSUNG ENGINEERING Co | Woori Technology vs. Winix Inc | Woori Technology vs. AfreecaTV Co |
| YOUNGHWA TECH vs. Koryo Credit Information | YOUNGHWA TECH vs. Samyoung Electronics Co | YOUNGHWA TECH vs. Okins Electronics Co | YOUNGHWA TECH vs. Jeong Moon Information |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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