Correlation Between Wonbang Tech and SFA Semicon
Can any of the company-specific risk be diversified away by investing in both Wonbang Tech and SFA Semicon 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 SFA Semicon 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 SFA Semicon Co, you can compare the effects of market volatilities on Wonbang Tech and SFA Semicon 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 SFA Semicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonbang Tech and SFA Semicon.
Diversification Opportunities for Wonbang Tech and SFA Semicon
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wonbang and SFA is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Wonbang Tech Co and SFA Semicon Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SFA Semicon 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 SFA Semicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SFA Semicon has no effect on the direction of Wonbang Tech i.e., Wonbang Tech and SFA Semicon go up and down completely randomly.
Pair Corralation between Wonbang Tech and SFA Semicon
Assuming the 90 days trading horizon Wonbang Tech Co is expected to under-perform the SFA Semicon. In addition to that, Wonbang Tech is 1.14 times more volatile than SFA Semicon Co. It trades about -0.18 of its total potential returns per unit of risk. SFA Semicon Co is currently generating about -0.11 per unit of volatility. If you would invest 359,000 in SFA Semicon Co on August 29, 2024 and sell it today you would lose (22,500) from holding SFA Semicon Co or give up 6.27% 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. SFA Semicon Co
Performance |
| Timeline |
| Wonbang Tech |
| SFA Semicon |
Wonbang Tech and SFA Semicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonbang Tech and SFA Semicon
The main advantage of trading using opposite Wonbang Tech and SFA Semicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonbang Tech position performs unexpectedly, SFA Semicon 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 SFA Semicon will offset losses from the drop in SFA Semicon'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 |
| SFA Semicon vs. Korea Real Estate | SFA Semicon vs. Korea Ratings Co | SFA Semicon vs. IQuest Co | SFA Semicon 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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