Correlation Between Wonbang Tech and Shinsegae Engineering
Can any of the company-specific risk be diversified away by investing in both Wonbang Tech and Shinsegae Engineering 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 Shinsegae Engineering 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 Shinsegae Engineering Construction, you can compare the effects of market volatilities on Wonbang Tech and Shinsegae Engineering 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 Shinsegae Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonbang Tech and Shinsegae Engineering.
Diversification Opportunities for Wonbang Tech and Shinsegae Engineering
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wonbang and Shinsegae is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Wonbang Tech Co and Shinsegae Engineering Construc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Engineering 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 Shinsegae Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Engineering has no effect on the direction of Wonbang Tech i.e., Wonbang Tech and Shinsegae Engineering go up and down completely randomly.
Pair Corralation between Wonbang Tech and Shinsegae Engineering
Assuming the 90 days trading horizon Wonbang Tech Co is expected to generate 1.58 times more return on investment than Shinsegae Engineering. However, Wonbang Tech is 1.58 times more volatile than Shinsegae Engineering Construction. It trades about 0.04 of its potential returns per unit of risk. Shinsegae Engineering Construction is currently generating about 0.02 per unit of risk. If you would invest 969,884 in Wonbang Tech Co on September 1, 2024 and sell it today you would earn a total of 316,116 from holding Wonbang Tech Co or generate 32.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wonbang Tech Co vs. Shinsegae Engineering Construc
Performance |
| Timeline |
| Wonbang Tech |
| Shinsegae Engineering |
Wonbang Tech and Shinsegae Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonbang Tech and Shinsegae Engineering
The main advantage of trading using opposite Wonbang Tech and Shinsegae Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonbang Tech position performs unexpectedly, Shinsegae Engineering 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 Shinsegae Engineering will offset losses from the drop in Shinsegae Engineering's long position.| Wonbang Tech vs. Kukdong Oil Chemicals | Wonbang Tech vs. Hana Financial | Wonbang Tech vs. Total Soft Bank | Wonbang Tech vs. Koryo Credit Information |
| Shinsegae Engineering vs. AptaBio Therapeutics | Shinsegae Engineering vs. Daewoo SBI SPAC | Shinsegae Engineering vs. Dream Security co | Shinsegae Engineering vs. Microfriend |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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