Correlation Between ECSTELECOM and WooriNet
Can any of the company-specific risk be diversified away by investing in both ECSTELECOM and WooriNet 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 ECSTELECOM and WooriNet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECSTELECOM Co and WooriNet, you can compare the effects of market volatilities on ECSTELECOM and WooriNet 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 ECSTELECOM with a short position of WooriNet. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECSTELECOM and WooriNet.
Diversification Opportunities for ECSTELECOM and WooriNet
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ECSTELECOM and WooriNet is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding ECSTELECOM Co and WooriNet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WooriNet and ECSTELECOM 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 ECSTELECOM Co are associated (or correlated) with WooriNet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WooriNet has no effect on the direction of ECSTELECOM i.e., ECSTELECOM and WooriNet go up and down completely randomly.
Pair Corralation between ECSTELECOM and WooriNet
Assuming the 90 days trading horizon ECSTELECOM Co is expected to generate 1.11 times more return on investment than WooriNet. However, ECSTELECOM is 1.11 times more volatile than WooriNet. It trades about 0.22 of its potential returns per unit of risk. WooriNet is currently generating about -0.07 per unit of risk. If you would invest 285,500 in ECSTELECOM Co on December 4, 2024 and sell it today you would earn a total of 25,000 from holding ECSTELECOM Co or generate 8.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ECSTELECOM Co vs. WooriNet
Performance |
| Timeline |
| ECSTELECOM |
| WooriNet |
ECSTELECOM and WooriNet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECSTELECOM and WooriNet
The main advantage of trading using opposite ECSTELECOM and WooriNet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECSTELECOM position performs unexpectedly, WooriNet 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 WooriNet will offset losses from the drop in WooriNet's long position.| ECSTELECOM vs. Nice Information Telecommunication | ECSTELECOM vs. INFINITT Healthcare Co | ECSTELECOM vs. YeaRimDang Publishing Co | ECSTELECOM vs. Lotte Chilsung Beverage |
| WooriNet vs. Namyang Dairy | WooriNet vs. RF Materials Co | WooriNet vs. Wing Yip Food | WooriNet vs. Hyundai Engineering Plastics |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |