Correlation Between Wonbang Tech and IQuest
Can any of the company-specific risk be diversified away by investing in both Wonbang Tech and IQuest 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 IQuest 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 IQuest Co, you can compare the effects of market volatilities on Wonbang Tech and IQuest 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 IQuest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonbang Tech and IQuest.
Diversification Opportunities for Wonbang Tech and IQuest
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Wonbang and IQuest is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Wonbang Tech Co and IQuest Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQuest 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 IQuest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQuest has no effect on the direction of Wonbang Tech i.e., Wonbang Tech and IQuest go up and down completely randomly.
Pair Corralation between Wonbang Tech and IQuest
Assuming the 90 days trading horizon Wonbang Tech Co is expected to generate 1.61 times more return on investment than IQuest. However, Wonbang Tech is 1.61 times more volatile than IQuest Co. It trades about 0.04 of its potential returns per unit of risk. IQuest Co is currently generating about -0.02 per unit of risk. If you would invest 919,245 in Wonbang Tech Co on August 24, 2024 and sell it today you would earn a total of 455,755 from holding Wonbang Tech Co or generate 49.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wonbang Tech Co vs. IQuest Co
Performance |
| Timeline |
| Wonbang Tech |
| IQuest |
Wonbang Tech and IQuest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonbang Tech and IQuest
The main advantage of trading using opposite Wonbang Tech and IQuest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonbang Tech position performs unexpectedly, IQuest 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 IQuest will offset losses from the drop in IQuest'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 |
| IQuest vs. Coloray International Investment | IQuest vs. DSC Investment | IQuest vs. Air Busan Co | IQuest vs. EBEST Investment Securities |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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