Correlation Between Woorim Machinery and Korea Information
Can any of the company-specific risk be diversified away by investing in both Woorim Machinery and Korea Information 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 Korea Information 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 Korea Information Engineering, you can compare the effects of market volatilities on Woorim Machinery and Korea Information 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 Korea Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woorim Machinery and Korea Information.
Diversification Opportunities for Woorim Machinery and Korea Information
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Woorim and Korea is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Woorim Machinery Co and Korea Information Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information 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 Korea Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of Woorim Machinery i.e., Woorim Machinery and Korea Information go up and down completely randomly.
Pair Corralation between Woorim Machinery and Korea Information
Assuming the 90 days trading horizon Woorim Machinery Co is expected to under-perform the Korea Information. In addition to that, Woorim Machinery is 2.1 times more volatile than Korea Information Engineering. It trades about -0.09 of its total potential returns per unit of risk. Korea Information Engineering is currently generating about -0.13 per unit of volatility. If you would invest 264,500 in Korea Information Engineering on September 2, 2024 and sell it today you would lose (28,000) from holding Korea Information Engineering or give up 10.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woorim Machinery Co vs. Korea Information Engineering
Performance |
| Timeline |
| Woorim Machinery |
| Korea Information |
Woorim Machinery and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woorim Machinery and Korea Information
The main advantage of trading using opposite Woorim Machinery and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woorim Machinery position performs unexpectedly, Korea Information 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 Korea Information will offset losses from the drop in Korea Information's long position.| Woorim Machinery vs. Korea New Network | Woorim Machinery vs. ICD Co | Woorim Machinery vs. DYPNF CoLtd | Woorim Machinery vs. Busan Industrial Co |
| Korea Information vs. Dongsin Engineering Construction | Korea Information vs. Doosan Fuel Cell | Korea Information vs. Daishin Balance 1 | Korea Information vs. Total Soft 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |