Correlation Between WONIK Materials and EBEST Investment
Can any of the company-specific risk be diversified away by investing in both WONIK Materials and EBEST Investment 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 EBEST Investment 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 EBEST Investment Securities, you can compare the effects of market volatilities on WONIK Materials and EBEST Investment 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 EBEST Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of WONIK Materials and EBEST Investment.
Diversification Opportunities for WONIK Materials and EBEST Investment
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WONIK and EBEST is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding WONIK Materials CoLtd and EBEST Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBEST Investment Sec 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 EBEST Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EBEST Investment Sec has no effect on the direction of WONIK Materials i.e., WONIK Materials and EBEST Investment go up and down completely randomly.
Pair Corralation between WONIK Materials and EBEST Investment
Assuming the 90 days trading horizon WONIK Materials CoLtd is expected to generate 2.34 times more return on investment than EBEST Investment. However, WONIK Materials is 2.34 times more volatile than EBEST Investment Securities. It trades about 0.0 of its potential returns per unit of risk. EBEST Investment Securities is currently generating about -0.42 per unit of risk. If you would invest 1,822,073 in WONIK Materials CoLtd on October 17, 2024 and sell it today you would lose (8,073) from holding WONIK Materials CoLtd or give up 0.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WONIK Materials CoLtd vs. EBEST Investment Securities
Performance |
| Timeline |
| WONIK Materials CoLtd |
| EBEST Investment Sec |
WONIK Materials and EBEST Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WONIK Materials and EBEST Investment
The main advantage of trading using opposite WONIK Materials and EBEST Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WONIK Materials position performs unexpectedly, EBEST Investment 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 EBEST Investment will offset losses from the drop in EBEST Investment's long position.| WONIK Materials vs. Soulbrain Holdings Co | WONIK Materials vs. Wonik Ips Co | WONIK Materials vs. TES Co | WONIK Materials vs. Suprema |
| EBEST Investment vs. LAKE MATERIALS LTD | EBEST Investment vs. WONIK Materials CoLtd | EBEST Investment vs. Kakao Games Corp | EBEST Investment vs. Mgame Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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