Correlation Between Woorim Machinery and HYBE
Can any of the company-specific risk be diversified away by investing in both Woorim Machinery and HYBE 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 HYBE 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 HYBE Co, you can compare the effects of market volatilities on Woorim Machinery and HYBE 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 HYBE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woorim Machinery and HYBE.
Diversification Opportunities for Woorim Machinery and HYBE
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Woorim and HYBE is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Woorim Machinery Co and HYBE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYBE 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 HYBE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYBE has no effect on the direction of Woorim Machinery i.e., Woorim Machinery and HYBE go up and down completely randomly.
Pair Corralation between Woorim Machinery and HYBE
Assuming the 90 days trading horizon Woorim Machinery is expected to generate 3.57 times less return on investment than HYBE. In addition to that, Woorim Machinery is 1.36 times more volatile than HYBE Co. It trades about 0.0 of its total potential returns per unit of risk. HYBE Co is currently generating about 0.02 per unit of volatility. If you would invest 17,794,800 in HYBE Co on October 7, 2024 and sell it today you would earn a total of 2,305,200 from holding HYBE Co or generate 12.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woorim Machinery Co vs. HYBE Co
Performance |
| Timeline |
| Woorim Machinery |
| HYBE |
Woorim Machinery and HYBE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woorim Machinery and HYBE
The main advantage of trading using opposite Woorim Machinery and HYBE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woorim Machinery position performs unexpectedly, HYBE 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 HYBE will offset losses from the drop in HYBE's long position.| Woorim Machinery vs. Woori Financial Group | Woorim Machinery vs. Jb Financial | Woorim Machinery vs. Nh Investment And | Woorim Machinery vs. Hyundai Heavy Industries |
| HYBE vs. KyungIn Electronics Co | HYBE vs. Korea Electronic Certification | HYBE vs. Okins Electronics Co | HYBE vs. Sangsin Energy Display |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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