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
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dongwoo and Innowireless is -0.1. 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 1.88 times less risky than Innowireless. The stock trades about -0.14 of its potential returns per unit of risk. The Innowireless Co is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 2,625,000 in Innowireless Co on September 3, 2024 and sell it today you would lose (812,000) from holding Innowireless Co or give up 30.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.37% |
| Values | Daily Returns |
Dongwoo Farm To vs. Innowireless Co
Performance |
| Timeline |
| Dongwoo Farm To |
| Innowireless |
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. Hanjoo Light Metal | Dongwoo Farm vs. LG Chemicals | Dongwoo Farm vs. Hannong Chemicals | Dongwoo Farm vs. Kukil Metal Co |
| Innowireless vs. Korea Computer | Innowireless vs. Lotte Data Communication | Innowireless vs. Samsung Publishing Co | Innowireless vs. Neungyule Education |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |