Correlation Between Wonbang Tech and JUSUNG ENGINEERING
Can any of the company-specific risk be diversified away by investing in both Wonbang Tech and JUSUNG 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 JUSUNG 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 JUSUNG ENGINEERING Co, you can compare the effects of market volatilities on Wonbang Tech and JUSUNG 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 JUSUNG ENGINEERING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonbang Tech and JUSUNG ENGINEERING.
Diversification Opportunities for Wonbang Tech and JUSUNG ENGINEERING
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wonbang and JUSUNG is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Wonbang Tech Co and JUSUNG ENGINEERING Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JUSUNG 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 JUSUNG ENGINEERING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JUSUNG ENGINEERING has no effect on the direction of Wonbang Tech i.e., Wonbang Tech and JUSUNG ENGINEERING go up and down completely randomly.
Pair Corralation between Wonbang Tech and JUSUNG ENGINEERING
Assuming the 90 days trading horizon Wonbang Tech Co is expected to under-perform the JUSUNG ENGINEERING. But the stock apears to be less risky and, when comparing its historical volatility, Wonbang Tech Co is 1.66 times less risky than JUSUNG ENGINEERING. The stock trades about -0.18 of its potential returns per unit of risk. The JUSUNG ENGINEERING Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,705,000 in JUSUNG ENGINEERING Co on August 29, 2024 and sell it today you would earn a total of 320,000 from holding JUSUNG ENGINEERING Co or generate 11.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wonbang Tech Co vs. JUSUNG ENGINEERING Co
Performance |
| Timeline |
| Wonbang Tech |
| JUSUNG ENGINEERING |
Wonbang Tech and JUSUNG ENGINEERING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonbang Tech and JUSUNG ENGINEERING
The main advantage of trading using opposite Wonbang Tech and JUSUNG ENGINEERING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonbang Tech position performs unexpectedly, JUSUNG 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 JUSUNG ENGINEERING will offset losses from the drop in JUSUNG ENGINEERING'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 |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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