Correlation Between Wonbang Tech and Daelim Trading
Can any of the company-specific risk be diversified away by investing in both Wonbang Tech and Daelim Trading 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 Daelim Trading 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 Daelim Trading Co, you can compare the effects of market volatilities on Wonbang Tech and Daelim Trading 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 Daelim Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonbang Tech and Daelim Trading.
Diversification Opportunities for Wonbang Tech and Daelim Trading
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wonbang and Daelim is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Wonbang Tech Co and Daelim Trading Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daelim Trading 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 Daelim Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daelim Trading has no effect on the direction of Wonbang Tech i.e., Wonbang Tech and Daelim Trading go up and down completely randomly.
Pair Corralation between Wonbang Tech and Daelim Trading
Assuming the 90 days trading horizon Wonbang Tech Co is expected to under-perform the Daelim Trading. In addition to that, Wonbang Tech is 1.24 times more volatile than Daelim Trading Co. It trades about -0.13 of its total potential returns per unit of risk. Daelim Trading Co is currently generating about -0.09 per unit of volatility. If you would invest 282,000 in Daelim Trading Co on September 24, 2024 and sell it today you would lose (16,500) from holding Daelim Trading Co or give up 5.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wonbang Tech Co vs. Daelim Trading Co
Performance |
| Timeline |
| Wonbang Tech |
| Daelim Trading |
Wonbang Tech and Daelim Trading Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonbang Tech and Daelim Trading
The main advantage of trading using opposite Wonbang Tech and Daelim Trading positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonbang Tech position performs unexpectedly, Daelim Trading 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 Daelim Trading will offset losses from the drop in Daelim Trading's long position.| Wonbang Tech vs. Samsung Electronics Co | Wonbang Tech vs. Samsung Electronics Co | Wonbang Tech vs. LG Energy Solution | Wonbang Tech vs. SK Hynix |
| Daelim Trading vs. AptaBio Therapeutics | Daelim Trading vs. Wonbang Tech Co | Daelim Trading vs. Busan Industrial Co | Daelim Trading vs. Busan Ind |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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