Correlation Between Wonbang Tech and System
Can any of the company-specific risk be diversified away by investing in both Wonbang Tech and System 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 System 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 System and Application, you can compare the effects of market volatilities on Wonbang Tech and System 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 System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonbang Tech and System.
Diversification Opportunities for Wonbang Tech and System
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wonbang and System is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Wonbang Tech Co and System and Application in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on System and Application 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 System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of System and Application has no effect on the direction of Wonbang Tech i.e., Wonbang Tech and System go up and down completely randomly.
Pair Corralation between Wonbang Tech and System
Assuming the 90 days trading horizon Wonbang Tech Co is expected to under-perform the System. In addition to that, Wonbang Tech is 1.03 times more volatile than System and Application. It trades about -0.18 of its total potential returns per unit of risk. System and Application is currently generating about 0.08 per unit of volatility. If you would invest 141,900 in System and Application on August 29, 2024 and sell it today you would earn a total of 5,500 from holding System and Application or generate 3.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wonbang Tech Co vs. System and Application
Performance |
| Timeline |
| Wonbang Tech |
| System and Application |
Wonbang Tech and System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonbang Tech and System
The main advantage of trading using opposite Wonbang Tech and System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonbang Tech position performs unexpectedly, System 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 System will offset losses from the drop in System'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 |
| System vs. Korea Real Estate | System vs. Korea Ratings Co | System vs. IQuest Co | System 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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