Correlation Between Wonbang Tech and Namyang Dairy
Can any of the company-specific risk be diversified away by investing in both Wonbang Tech and Namyang Dairy 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 Namyang Dairy 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 Namyang Dairy, you can compare the effects of market volatilities on Wonbang Tech and Namyang Dairy 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 Namyang Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonbang Tech and Namyang Dairy.
Diversification Opportunities for Wonbang Tech and Namyang Dairy
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wonbang and Namyang is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Wonbang Tech Co and Namyang Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namyang Dairy 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 Namyang Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Namyang Dairy has no effect on the direction of Wonbang Tech i.e., Wonbang Tech and Namyang Dairy go up and down completely randomly.
Pair Corralation between Wonbang Tech and Namyang Dairy
Assuming the 90 days trading horizon Wonbang Tech is expected to generate 21.69 times less return on investment than Namyang Dairy. But when comparing it to its historical volatility, Wonbang Tech Co is 14.42 times less risky than Namyang Dairy. It trades about 0.04 of its potential returns per unit of risk. Namyang Dairy is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,293,370 in Namyang Dairy on September 2, 2024 and sell it today you would earn a total of 2,516,630 from holding Namyang Dairy or generate 58.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Wonbang Tech Co vs. Namyang Dairy
Performance |
| Timeline |
| Wonbang Tech |
| Namyang Dairy |
Wonbang Tech and Namyang Dairy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonbang Tech and Namyang Dairy
The main advantage of trading using opposite Wonbang Tech and Namyang Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonbang Tech position performs unexpectedly, Namyang Dairy 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 Namyang Dairy will offset losses from the drop in Namyang Dairy'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 |
| Namyang Dairy vs. Korea Real Estate | Namyang Dairy vs. Korea Ratings Co | Namyang Dairy vs. IQuest Co | Namyang Dairy vs. Wonbang Tech 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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