Correlation Between Woorim Machinery and TJ Media
Can any of the company-specific risk be diversified away by investing in both Woorim Machinery and TJ Media 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 Woorim Machinery and TJ Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woorim Machinery Co and TJ media Co, you can compare the effects of market volatilities on Woorim Machinery and TJ Media 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 Woorim Machinery with a short position of TJ Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woorim Machinery and TJ Media.
Diversification Opportunities for Woorim Machinery and TJ Media
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Woorim and 032540 is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Woorim Machinery Co and TJ media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TJ media and Woorim Machinery 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 Woorim Machinery Co are associated (or correlated) with TJ Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TJ media has no effect on the direction of Woorim Machinery i.e., Woorim Machinery and TJ Media go up and down completely randomly.
Pair Corralation between Woorim Machinery and TJ Media
Assuming the 90 days trading horizon Woorim Machinery Co is expected to generate 2.39 times more return on investment than TJ Media. However, Woorim Machinery is 2.39 times more volatile than TJ media Co. It trades about 0.01 of its potential returns per unit of risk. TJ media Co is currently generating about -0.01 per unit of risk. If you would invest 581,047 in Woorim Machinery Co on October 16, 2024 and sell it today you would lose (54,047) from holding Woorim Machinery Co or give up 9.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woorim Machinery Co vs. TJ media Co
Performance |
| Timeline |
| Woorim Machinery |
| TJ media |
Woorim Machinery and TJ Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woorim Machinery and TJ Media
The main advantage of trading using opposite Woorim Machinery and TJ Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woorim Machinery position performs unexpectedly, TJ Media 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 TJ Media will offset losses from the drop in TJ Media's long position.| Woorim Machinery vs. Coloray International Investment | Woorim Machinery vs. Golden Bridge Investment | Woorim Machinery vs. Atinum Investment Co | Woorim Machinery vs. Hansol Chemical Co |
| TJ Media vs. Woorim Machinery Co | TJ Media vs. Seoam Machinery Industry | TJ Media vs. Nam Hwa Construction | TJ Media vs. SK Chemicals 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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