Correlation Between EBEST Investment and Woori Technology
Can any of the company-specific risk be diversified away by investing in both EBEST Investment and Woori Technology 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 EBEST Investment and Woori Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EBEST Investment Securities and Woori Technology Investment, you can compare the effects of market volatilities on EBEST Investment and Woori Technology 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 EBEST Investment with a short position of Woori Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBEST Investment and Woori Technology.
Diversification Opportunities for EBEST Investment and Woori Technology
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EBEST and Woori is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding EBEST Investment Securities and Woori Technology Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Technology Inv and EBEST Investment 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 EBEST Investment Securities are associated (or correlated) with Woori Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woori Technology Inv has no effect on the direction of EBEST Investment i.e., EBEST Investment and Woori Technology go up and down completely randomly.
Pair Corralation between EBEST Investment and Woori Technology
Assuming the 90 days trading horizon EBEST Investment Securities is expected to under-perform the Woori Technology. But the stock apears to be less risky and, when comparing its historical volatility, EBEST Investment Securities is 4.67 times less risky than Woori Technology. The stock trades about -0.2 of its potential returns per unit of risk. The Woori Technology Investment is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 828,000 in Woori Technology Investment on August 28, 2024 and sell it today you would earn a total of 122,000 from holding Woori Technology Investment or generate 14.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EBEST Investment Securities vs. Woori Technology Investment
Performance |
| Timeline |
| EBEST Investment Sec |
| Woori Technology Inv |
EBEST Investment and Woori Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBEST Investment and Woori Technology
The main advantage of trading using opposite EBEST Investment and Woori Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBEST Investment position performs unexpectedly, Woori Technology 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 Woori Technology will offset losses from the drop in Woori Technology's long position.| EBEST Investment vs. Korea New Network | EBEST Investment vs. Dong A Eltek | EBEST Investment vs. Dreamus Company | EBEST Investment vs. SK Bioscience Co |
| Woori Technology vs. Humasis Co | Woori Technology vs. JUSUNG ENGINEERING Co | Woori Technology vs. Winix Inc | Woori Technology vs. AfreecaTV 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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