Correlation Between Wonbang Tech and GaeaSoft Corp
Can any of the company-specific risk be diversified away by investing in both Wonbang Tech and GaeaSoft Corp 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 GaeaSoft Corp 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 GaeaSoft Corp, you can compare the effects of market volatilities on Wonbang Tech and GaeaSoft Corp 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 GaeaSoft Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonbang Tech and GaeaSoft Corp.
Diversification Opportunities for Wonbang Tech and GaeaSoft Corp
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wonbang and GaeaSoft is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Wonbang Tech Co and GaeaSoft Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GaeaSoft Corp 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 GaeaSoft Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GaeaSoft Corp has no effect on the direction of Wonbang Tech i.e., Wonbang Tech and GaeaSoft Corp go up and down completely randomly.
Pair Corralation between Wonbang Tech and GaeaSoft Corp
Assuming the 90 days trading horizon Wonbang Tech Co is expected to generate 1.44 times more return on investment than GaeaSoft Corp. However, Wonbang Tech is 1.44 times more volatile than GaeaSoft Corp. It trades about 0.04 of its potential returns per unit of risk. GaeaSoft Corp is currently generating about 0.03 per unit of risk. If you would invest 954,162 in Wonbang Tech Co on August 31, 2024 and sell it today you would earn a total of 331,838 from holding Wonbang Tech Co or generate 34.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
Wonbang Tech Co vs. GaeaSoft Corp
Performance |
| Timeline |
| Wonbang Tech |
| GaeaSoft Corp |
Wonbang Tech and GaeaSoft Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonbang Tech and GaeaSoft Corp
The main advantage of trading using opposite Wonbang Tech and GaeaSoft Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonbang Tech position performs unexpectedly, GaeaSoft Corp 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 GaeaSoft Corp will offset losses from the drop in GaeaSoft Corp's long position.| Wonbang Tech vs. Dongil Metal Co | Wonbang Tech vs. Shinhan Inverse Copper | Wonbang Tech vs. Dgb Financial | Wonbang Tech vs. Cuckoo Homesys Co |
| GaeaSoft Corp vs. GS Engineering Construction | GaeaSoft Corp vs. Miwon Chemicals Co | GaeaSoft Corp vs. Semyung Electric Machinery | GaeaSoft Corp vs. Keyang Electric Machinery |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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