Correlation Between Wonbang Tech and Jeju Bank
Can any of the company-specific risk be diversified away by investing in both Wonbang Tech and Jeju Bank 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 Wonbang Tech and Jeju Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wonbang Tech Co and Jeju Bank, you can compare the effects of market volatilities on Wonbang Tech and Jeju Bank 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 Wonbang Tech with a short position of Jeju Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonbang Tech and Jeju Bank.
Diversification Opportunities for Wonbang Tech and Jeju Bank
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wonbang and Jeju is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Wonbang Tech Co and Jeju Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Bank and Wonbang Tech 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 Wonbang Tech Co are associated (or correlated) with Jeju Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Bank has no effect on the direction of Wonbang Tech i.e., Wonbang Tech and Jeju Bank go up and down completely randomly.
Pair Corralation between Wonbang Tech and Jeju Bank
Assuming the 90 days trading horizon Wonbang Tech Co is expected to generate 3.65 times more return on investment than Jeju Bank. However, Wonbang Tech is 3.65 times more volatile than Jeju Bank. It trades about 0.26 of its potential returns per unit of risk. Jeju Bank is currently generating about 0.42 per unit of risk. If you would invest 1,325,000 in Wonbang Tech Co on November 27, 2024 and sell it today you would earn a total of 126,000 from holding Wonbang Tech Co or generate 9.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wonbang Tech Co vs. Jeju Bank
Performance |
| Timeline |
| Wonbang Tech |
| Jeju Bank |
Wonbang Tech and Jeju Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonbang Tech and Jeju Bank
The main advantage of trading using opposite Wonbang Tech and Jeju Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonbang Tech position performs unexpectedly, Jeju Bank 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 Jeju Bank will offset losses from the drop in Jeju Bank's long position.| Wonbang Tech vs. Display Tech Co | Wonbang Tech vs. Inzi Display CoLtd | Wonbang Tech vs. Sangsin Energy Display | Wonbang Tech vs. DoubleU Games Co |
| Jeju Bank vs. Jin Air Co | Jeju Bank vs. ITM Semiconductor Co | Jeju Bank vs. Mirai Semiconductors Co | Jeju Bank vs. Barunson Entertainment Arts |
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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