Correlation Between WONIK Materials and MEDIPOST
Can any of the company-specific risk be diversified away by investing in both WONIK Materials and MEDIPOST 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 MEDIPOST 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 MEDIPOST Co, you can compare the effects of market volatilities on WONIK Materials and MEDIPOST 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 MEDIPOST. Check out your portfolio center. Please also check ongoing floating volatility patterns of WONIK Materials and MEDIPOST.
Diversification Opportunities for WONIK Materials and MEDIPOST
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between WONIK and MEDIPOST is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding WONIK Materials CoLtd and MEDIPOST Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDIPOST 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 MEDIPOST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDIPOST has no effect on the direction of WONIK Materials i.e., WONIK Materials and MEDIPOST go up and down completely randomly.
Pair Corralation between WONIK Materials and MEDIPOST
Assuming the 90 days trading horizon WONIK Materials CoLtd is expected to generate 0.45 times more return on investment than MEDIPOST. However, WONIK Materials CoLtd is 2.21 times less risky than MEDIPOST. It trades about -0.07 of its potential returns per unit of risk. MEDIPOST Co is currently generating about -0.08 per unit of risk. If you would invest 1,846,000 in WONIK Materials CoLtd on November 6, 2024 and sell it today you would lose (46,000) from holding WONIK Materials CoLtd or give up 2.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WONIK Materials CoLtd vs. MEDIPOST Co
Performance |
| Timeline |
| WONIK Materials CoLtd |
| MEDIPOST |
WONIK Materials and MEDIPOST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WONIK Materials and MEDIPOST
The main advantage of trading using opposite WONIK Materials and MEDIPOST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WONIK Materials position performs unexpectedly, MEDIPOST 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 MEDIPOST will offset losses from the drop in MEDIPOST's long position.| WONIK Materials vs. LG Chemicals | WONIK Materials vs. POSCO Holdings | WONIK Materials vs. Hanwha Solutions | WONIK Materials vs. Lotte Chemical Corp |
| MEDIPOST vs. Daishin Information Communications | MEDIPOST vs. Ssangyong Information Communication | MEDIPOST vs. Echomarketing CoLtd | MEDIPOST vs. Kisan Telecom 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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