Correlation Between Worldex Industry and WONIK Materials
Can any of the company-specific risk be diversified away by investing in both Worldex Industry and WONIK Materials 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 Worldex Industry and WONIK Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Worldex Industry Trading and WONIK Materials CoLtd, you can compare the effects of market volatilities on Worldex Industry and WONIK Materials 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 Worldex Industry with a short position of WONIK Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worldex Industry and WONIK Materials.
Diversification Opportunities for Worldex Industry and WONIK Materials
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Worldex and WONIK is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Worldex Industry Trading and WONIK Materials CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WONIK Materials CoLtd and Worldex Industry 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 Worldex Industry Trading are associated (or correlated) with WONIK Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WONIK Materials CoLtd has no effect on the direction of Worldex Industry i.e., Worldex Industry and WONIK Materials go up and down completely randomly.
Pair Corralation between Worldex Industry and WONIK Materials
Assuming the 90 days trading horizon Worldex Industry Trading is expected to generate 1.14 times more return on investment than WONIK Materials. However, Worldex Industry is 1.14 times more volatile than WONIK Materials CoLtd. It trades about 0.11 of its potential returns per unit of risk. WONIK Materials CoLtd is currently generating about 0.0 per unit of risk. If you would invest 1,658,927 in Worldex Industry Trading on October 17, 2024 and sell it today you would earn a total of 73,073 from holding Worldex Industry Trading or generate 4.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Worldex Industry Trading vs. WONIK Materials CoLtd
Performance |
| Timeline |
| Worldex Industry Trading |
| WONIK Materials CoLtd |
Worldex Industry and WONIK Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Worldex Industry and WONIK Materials
The main advantage of trading using opposite Worldex Industry and WONIK Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worldex Industry position performs unexpectedly, WONIK Materials 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 WONIK Materials will offset losses from the drop in WONIK Materials' long position.| Worldex Industry vs. WONIK Materials CoLtd | Worldex Industry vs. SS TECH | Worldex Industry vs. TES Co | Worldex Industry vs. LEENO Industrial |
| WONIK Materials vs. Soulbrain Holdings Co | WONIK Materials vs. Wonik Ips Co | WONIK Materials vs. TES Co | WONIK Materials vs. Dongjin Semichem 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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