Correlation Between WONIK Materials and Soulbrain Holdings
Can any of the company-specific risk be diversified away by investing in both WONIK Materials and Soulbrain Holdings 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 WONIK Materials and Soulbrain Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WONIK Materials CoLtd and Soulbrain Holdings Co, you can compare the effects of market volatilities on WONIK Materials and Soulbrain Holdings 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 WONIK Materials with a short position of Soulbrain Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of WONIK Materials and Soulbrain Holdings.
Diversification Opportunities for WONIK Materials and Soulbrain Holdings
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between WONIK and Soulbrain is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding WONIK Materials CoLtd and Soulbrain Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soulbrain Holdings and WONIK Materials 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 WONIK Materials CoLtd are associated (or correlated) with Soulbrain Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soulbrain Holdings has no effect on the direction of WONIK Materials i.e., WONIK Materials and Soulbrain Holdings go up and down completely randomly.
Pair Corralation between WONIK Materials and Soulbrain Holdings
Assuming the 90 days trading horizon WONIK Materials CoLtd is expected to generate 0.49 times more return on investment than Soulbrain Holdings. However, WONIK Materials CoLtd is 2.06 times less risky than Soulbrain Holdings. It trades about 0.15 of its potential returns per unit of risk. Soulbrain Holdings Co is currently generating about 0.0 per unit of risk. If you would invest 1,740,783 in WONIK Materials CoLtd on October 20, 2024 and sell it today you would earn a total of 96,217 from holding WONIK Materials CoLtd or generate 5.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WONIK Materials CoLtd vs. Soulbrain Holdings Co
Performance |
| Timeline |
| WONIK Materials CoLtd |
| Soulbrain Holdings |
WONIK Materials and Soulbrain Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WONIK Materials and Soulbrain Holdings
The main advantage of trading using opposite WONIK Materials and Soulbrain Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WONIK Materials position performs unexpectedly, Soulbrain Holdings 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 Soulbrain Holdings will offset losses from the drop in Soulbrain Holdings' long position.| WONIK Materials vs. Soulbrain Holdings Co | WONIK Materials vs. Wonik Ips Co | WONIK Materials vs. TES Co | WONIK Materials vs. Suprema |
| Soulbrain Holdings vs. SFA Engineering | Soulbrain Holdings vs. Seoul Semiconductor Co | Soulbrain Holdings vs. Wonik Ips 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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