Correlation Between Phoenix Materials and Wonil Special
Can any of the company-specific risk be diversified away by investing in both Phoenix Materials and Wonil Special 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 Phoenix Materials and Wonil Special into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phoenix Materials Co and Wonil Special Steel, you can compare the effects of market volatilities on Phoenix Materials and Wonil Special 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 Phoenix Materials with a short position of Wonil Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phoenix Materials and Wonil Special.
Diversification Opportunities for Phoenix Materials and Wonil Special
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Phoenix and Wonil is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Phoenix Materials Co and Wonil Special Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonil Special Steel and Phoenix Materials 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 Phoenix Materials Co are associated (or correlated) with Wonil Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonil Special Steel has no effect on the direction of Phoenix Materials i.e., Phoenix Materials and Wonil Special go up and down completely randomly.
Pair Corralation between Phoenix Materials and Wonil Special
Assuming the 90 days trading horizon Phoenix Materials Co is expected to under-perform the Wonil Special. In addition to that, Phoenix Materials is 3.53 times more volatile than Wonil Special Steel. It trades about -0.09 of its total potential returns per unit of risk. Wonil Special Steel is currently generating about 0.06 per unit of volatility. If you would invest 719,000 in Wonil Special Steel on September 3, 2024 and sell it today you would earn a total of 9,000 from holding Wonil Special Steel or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phoenix Materials Co vs. Wonil Special Steel
Performance |
| Timeline |
| Phoenix Materials |
| Wonil Special Steel |
Phoenix Materials and Wonil Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phoenix Materials and Wonil Special
The main advantage of trading using opposite Phoenix Materials and Wonil Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phoenix Materials position performs unexpectedly, Wonil Special 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 Wonil Special will offset losses from the drop in Wonil Special's long position.| Phoenix Materials vs. Pan Entertainment Co | Phoenix Materials vs. Jeong Moon Information | Phoenix Materials vs. Digital Multimedia Technology | Phoenix Materials vs. Lotte Data Communication |
| Wonil Special vs. Samwha Electronics Co | Wonil Special vs. KyungIn Electronics Co | Wonil Special vs. Daou Technology | Wonil Special vs. Cuckoo Electronics Co |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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