Correlation Between AeroSpace Technology and Wonil Special
Can any of the company-specific risk be diversified away by investing in both AeroSpace Technology and Wonil Special 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 AeroSpace Technology and Wonil Special into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AeroSpace Technology of and Wonil Special Steel, you can compare the effects of market volatilities on AeroSpace Technology and Wonil Special 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 AeroSpace Technology with a short position of Wonil Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of AeroSpace Technology and Wonil Special.
Diversification Opportunities for AeroSpace Technology and Wonil Special
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AeroSpace and Wonil is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding AeroSpace Technology of and Wonil Special Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonil Special Steel and AeroSpace Technology 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 AeroSpace Technology of are associated (or correlated) with Wonil Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonil Special Steel has no effect on the direction of AeroSpace Technology i.e., AeroSpace Technology and Wonil Special go up and down completely randomly.
Pair Corralation between AeroSpace Technology and Wonil Special
Assuming the 90 days trading horizon AeroSpace Technology of is expected to generate 3.71 times more return on investment than Wonil Special. However, AeroSpace Technology is 3.71 times more volatile than Wonil Special Steel. It trades about 0.81 of its potential returns per unit of risk. Wonil Special Steel is currently generating about 0.17 per unit of risk. If you would invest 50,900 in AeroSpace Technology of on November 1, 2024 and sell it today you would earn a total of 25,200 from holding AeroSpace Technology of or generate 49.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AeroSpace Technology of vs. Wonil Special Steel
Performance |
| Timeline |
| AeroSpace Technology |
| Wonil Special Steel |
AeroSpace Technology and Wonil Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AeroSpace Technology and Wonil Special
The main advantage of trading using opposite AeroSpace Technology and Wonil Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AeroSpace Technology position performs unexpectedly, Wonil Special 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 Wonil Special will offset losses from the drop in Wonil Special's long position.| AeroSpace Technology vs. Shinhan Inverse Silver | AeroSpace Technology vs. Keyang Electric Machinery | AeroSpace Technology vs. Taegu Broadcasting | AeroSpace Technology vs. Sungdo Engineering Construction |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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