Correlation Between Woori Technology and SK Bioscience
Can any of the company-specific risk be diversified away by investing in both Woori Technology and SK Bioscience 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 SK Bioscience 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 SK Bioscience Co, you can compare the effects of market volatilities on Woori Technology and SK Bioscience 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 SK Bioscience. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and SK Bioscience.
Diversification Opportunities for Woori Technology and SK Bioscience
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Woori and 302440 is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology Investment and SK Bioscience Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Bioscience 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 SK Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Bioscience has no effect on the direction of Woori Technology i.e., Woori Technology and SK Bioscience go up and down completely randomly.
Pair Corralation between Woori Technology and SK Bioscience
Assuming the 90 days trading horizon Woori Technology Investment is expected to generate 1.58 times more return on investment than SK Bioscience. However, Woori Technology is 1.58 times more volatile than SK Bioscience Co. It trades about 0.03 of its potential returns per unit of risk. SK Bioscience Co is currently generating about -0.05 per unit of risk. If you would invest 830,000 in Woori Technology Investment on September 3, 2024 and sell it today you would earn a total of 48,000 from holding Woori Technology Investment or generate 5.78% 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. SK Bioscience Co
Performance |
Timeline |
Woori Technology Inv |
SK Bioscience |
Woori Technology and SK Bioscience Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Woori Technology and SK Bioscience
The main advantage of trading using opposite Woori Technology and SK Bioscience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, SK Bioscience 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 SK Bioscience will offset losses from the drop in SK Bioscience's long position.Woori Technology vs. Humasis Co | Woori Technology vs. JUSUNG ENGINEERING Co | Woori Technology vs. Winix Inc | Woori Technology vs. AfreecaTV Co |
SK Bioscience vs. Kisan Telecom Co | SK Bioscience vs. Digital Power Communications | SK Bioscience vs. Jeong Moon Information | SK Bioscience vs. Shinsegae Information Communication |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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