Correlation Between Dongwoo Farm and Innowireless
Can any of the company-specific risk be diversified away by investing in both Dongwoo Farm and Innowireless 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 Dongwoo Farm and Innowireless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongwoo Farm To and Innowireless Co, you can compare the effects of market volatilities on Dongwoo Farm and Innowireless 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 Dongwoo Farm with a short position of Innowireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwoo Farm and Innowireless.
Diversification Opportunities for Dongwoo Farm and Innowireless
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dongwoo and Innowireless is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Dongwoo Farm To and Innowireless Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innowireless and Dongwoo Farm 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 Dongwoo Farm To are associated (or correlated) with Innowireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innowireless has no effect on the direction of Dongwoo Farm i.e., Dongwoo Farm and Innowireless go up and down completely randomly.
Pair Corralation between Dongwoo Farm and Innowireless
Assuming the 90 days trading horizon Dongwoo Farm To is expected to under-perform the Innowireless. But the stock apears to be less risky and, when comparing its historical volatility, Dongwoo Farm To is 2.07 times less risky than Innowireless. The stock trades about -0.08 of its potential returns per unit of risk. The Innowireless Co is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2,120,000 in Innowireless Co on November 7, 2024 and sell it today you would earn a total of 160,000 from holding Innowireless Co or generate 7.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongwoo Farm To vs. Innowireless Co
Performance |
| Timeline |
| Dongwoo Farm To |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Innowireless |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Dongwoo Farm and Innowireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwoo Farm and Innowireless
The main advantage of trading using opposite Dongwoo Farm and Innowireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwoo Farm position performs unexpectedly, Innowireless 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 Innowireless will offset losses from the drop in Innowireless' long position.| Dongwoo Farm vs. Dongnam Chemical Co | Dongwoo Farm vs. ISU Chemical Co | Dongwoo Farm vs. FNC Entertainment Co | Dongwoo Farm vs. Kaonmedia Co |
| Innowireless vs. Genie Music | Innowireless vs. Wonbang Tech Co | Innowireless vs. Vitzro Tech Co | Innowireless vs. Jeju Bank |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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