Correlation Between Dongwoo Farm and Wooyang
Can any of the company-specific risk be diversified away by investing in both Dongwoo Farm and Wooyang 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 Wooyang 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 Wooyang Co, you can compare the effects of market volatilities on Dongwoo Farm and Wooyang 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 Wooyang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwoo Farm and Wooyang.
Diversification Opportunities for Dongwoo Farm and Wooyang
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dongwoo and Wooyang is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Dongwoo Farm To and Wooyang Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wooyang 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 Wooyang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wooyang has no effect on the direction of Dongwoo Farm i.e., Dongwoo Farm and Wooyang go up and down completely randomly.
Pair Corralation between Dongwoo Farm and Wooyang
Assuming the 90 days trading horizon Dongwoo Farm To is expected to under-perform the Wooyang. But the stock apears to be less risky and, when comparing its historical volatility, Dongwoo Farm To is 3.41 times less risky than Wooyang. The stock trades about -0.17 of its potential returns per unit of risk. The Wooyang Co is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 481,500 in Wooyang Co on August 25, 2024 and sell it today you would lose (166,500) from holding Wooyang Co or give up 34.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongwoo Farm To vs. Wooyang Co
Performance |
| Timeline |
| Dongwoo Farm To |
| Wooyang |
Dongwoo Farm and Wooyang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwoo Farm and Wooyang
The main advantage of trading using opposite Dongwoo Farm and Wooyang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwoo Farm position performs unexpectedly, Wooyang 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 Wooyang will offset losses from the drop in Wooyang's long position.| Dongwoo Farm vs. Maeil Dairies Co | Dongwoo Farm vs. HYUNDAI FEED | Dongwoo Farm vs. Wooyang Co | Dongwoo Farm vs. Asia Seed CoLtd |
| Wooyang vs. SBI Investment KOREA | Wooyang vs. Lindeman Asia Investment | Wooyang vs. SV Investment | Wooyang vs. LB Investment |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |