Correlation Between Woorim Machinery and Raontech
Can any of the company-specific risk be diversified away by investing in both Woorim Machinery and Raontech 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 Raontech 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 Raontech, you can compare the effects of market volatilities on Woorim Machinery and Raontech 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 Raontech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woorim Machinery and Raontech.
Diversification Opportunities for Woorim Machinery and Raontech
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Woorim and Raontech is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Woorim Machinery Co and Raontech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raontech 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 Raontech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raontech has no effect on the direction of Woorim Machinery i.e., Woorim Machinery and Raontech go up and down completely randomly.
Pair Corralation between Woorim Machinery and Raontech
Assuming the 90 days trading horizon Woorim Machinery Co is expected to generate 0.88 times more return on investment than Raontech. However, Woorim Machinery Co is 1.14 times less risky than Raontech. It trades about 0.18 of its potential returns per unit of risk. Raontech is currently generating about 0.1 per unit of risk. If you would invest 487,000 in Woorim Machinery Co on October 18, 2024 and sell it today you would earn a total of 55,000 from holding Woorim Machinery Co or generate 11.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woorim Machinery Co vs. Raontech
Performance |
| Timeline |
| Woorim Machinery |
| Raontech |
Woorim Machinery and Raontech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woorim Machinery and Raontech
The main advantage of trading using opposite Woorim Machinery and Raontech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woorim Machinery position performs unexpectedly, Raontech 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 Raontech will offset losses from the drop in Raontech's long position.| Woorim Machinery vs. Jeil Steel Mfg | Woorim Machinery vs. Shinhan Financial Group | Woorim Machinery vs. INSUN Environmental New | Woorim Machinery vs. Fine Besteel Co |
| Raontech vs. Sam Yang Foods | Raontech vs. Woorim Machinery Co | Raontech vs. Keyang Electric Machinery | Raontech vs. Samyang Foods 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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