Correlation Between Woori Technology and RF Materials
Can any of the company-specific risk be diversified away by investing in both Woori Technology and RF Materials 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 RF Materials 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 RF Materials Co, you can compare the effects of market volatilities on Woori Technology and RF Materials 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 RF Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and RF Materials.
Diversification Opportunities for Woori Technology and RF Materials
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Woori and 327260 is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology Investment and RF Materials Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RF Materials 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 RF Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RF Materials has no effect on the direction of Woori Technology i.e., Woori Technology and RF Materials go up and down completely randomly.
Pair Corralation between Woori Technology and RF Materials
Assuming the 90 days trading horizon Woori Technology Investment is expected to generate 1.15 times more return on investment than RF Materials. However, Woori Technology is 1.15 times more volatile than RF Materials Co. It trades about 0.01 of its potential returns per unit of risk. RF Materials Co is currently generating about -0.06 per unit of risk. If you would invest 806,000 in Woori Technology Investment on October 30, 2024 and sell it today you would lose (56,000) from holding Woori Technology Investment or give up 6.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Technology Investment vs. RF Materials Co
Performance |
| Timeline |
| Woori Technology Inv |
| RF Materials |
Woori Technology and RF Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and RF Materials
The main advantage of trading using opposite Woori Technology and RF Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, RF Materials 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 RF Materials will offset losses from the drop in RF Materials' long position.| Woori Technology vs. Humasis Co | Woori Technology vs. JUSUNG ENGINEERING Co | Woori Technology vs. Winix Inc | Woori Technology vs. AfreecaTV Co |
| RF Materials vs. E Investment Development | RF Materials vs. LB Investment | RF Materials vs. Next Entertainment World | RF Materials vs. Digital Multimedia Technology |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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