Correlation Between Wonbang Tech and Innometry
Can any of the company-specific risk be diversified away by investing in both Wonbang Tech and Innometry 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 Innometry 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 Innometry Co, you can compare the effects of market volatilities on Wonbang Tech and Innometry 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 Innometry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonbang Tech and Innometry.
Diversification Opportunities for Wonbang Tech and Innometry
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wonbang and Innometry is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Wonbang Tech Co and Innometry Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innometry 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 Innometry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innometry has no effect on the direction of Wonbang Tech i.e., Wonbang Tech and Innometry go up and down completely randomly.
Pair Corralation between Wonbang Tech and Innometry
Assuming the 90 days trading horizon Wonbang Tech Co is expected to generate 1.39 times more return on investment than Innometry. However, Wonbang Tech is 1.39 times more volatile than Innometry Co. It trades about 0.04 of its potential returns per unit of risk. Innometry Co is currently generating about -0.03 per unit of risk. If you would invest 919,245 in Wonbang Tech Co on August 24, 2024 and sell it today you would earn a total of 439,755 from holding Wonbang Tech Co or generate 47.84% 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. Innometry Co
Performance |
| Timeline |
| Wonbang Tech |
| Innometry |
Wonbang Tech and Innometry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonbang Tech and Innometry
The main advantage of trading using opposite Wonbang Tech and Innometry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonbang Tech position performs unexpectedly, Innometry 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 Innometry will offset losses from the drop in Innometry's long position.| Wonbang Tech vs. Coloray International Investment | Wonbang Tech vs. Seoul Broadcasting System | Wonbang Tech vs. LB Investment | Wonbang Tech vs. Woori Technology Investment |
| Innometry vs. Daejoo Electronic Materials | Innometry vs. Parksystems Corp | Innometry vs. BH Co | Innometry vs. Partron 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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