Correlation Between Wooyang and Daiyang Metal
Can any of the company-specific risk be diversified away by investing in both Wooyang and Daiyang Metal 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 Wooyang and Daiyang Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wooyang Co and Daiyang Metal Co, you can compare the effects of market volatilities on Wooyang and Daiyang Metal 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 Wooyang with a short position of Daiyang Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wooyang and Daiyang Metal.
Diversification Opportunities for Wooyang and Daiyang Metal
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Wooyang and Daiyang is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Wooyang Co and Daiyang Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daiyang Metal and Wooyang 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 Wooyang Co are associated (or correlated) with Daiyang Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daiyang Metal has no effect on the direction of Wooyang i.e., Wooyang and Daiyang Metal go up and down completely randomly.
Pair Corralation between Wooyang and Daiyang Metal
Assuming the 90 days trading horizon Wooyang Co is expected to generate 0.89 times more return on investment than Daiyang Metal. However, Wooyang Co is 1.12 times less risky than Daiyang Metal. It trades about 0.02 of its potential returns per unit of risk. Daiyang Metal Co is currently generating about -0.01 per unit of risk. If you would invest 293,500 in Wooyang Co on November 8, 2024 and sell it today you would earn a total of 10,000 from holding Wooyang Co or generate 3.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.16% |
| Values | Daily Returns |
Wooyang Co vs. Daiyang Metal Co
Performance |
| Timeline |
| Wooyang |
| Daiyang Metal |
Wooyang and Daiyang Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wooyang and Daiyang Metal
The main advantage of trading using opposite Wooyang and Daiyang Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wooyang position performs unexpectedly, Daiyang Metal 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 Daiyang Metal will offset losses from the drop in Daiyang Metal's long position.| Wooyang vs. Maeil Dairies Co | Wooyang vs. Neo Cremar Co | Wooyang vs. Dongwoo Farm To | Wooyang vs. Wing Yip Food |
| Daiyang Metal vs. Alton Sports CoLtd | Daiyang Metal vs. Duksan Hi Metal | Daiyang Metal vs. Handok Clean Tech | Daiyang Metal vs. Kbi Metal 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |