Correlation Between WONIK Materials and Ecopro
Can any of the company-specific risk be diversified away by investing in both WONIK Materials and Ecopro 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 Ecopro 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 Ecopro Co, you can compare the effects of market volatilities on WONIK Materials and Ecopro 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 Ecopro. Check out your portfolio center. Please also check ongoing floating volatility patterns of WONIK Materials and Ecopro.
Diversification Opportunities for WONIK Materials and Ecopro
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WONIK and Ecopro is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding WONIK Materials CoLtd and Ecopro Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecopro 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 Ecopro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecopro has no effect on the direction of WONIK Materials i.e., WONIK Materials and Ecopro go up and down completely randomly.
Pair Corralation between WONIK Materials and Ecopro
Assuming the 90 days trading horizon WONIK Materials CoLtd is expected to generate 0.48 times more return on investment than Ecopro. However, WONIK Materials CoLtd is 2.09 times less risky than Ecopro. It trades about 0.12 of its potential returns per unit of risk. Ecopro Co is currently generating about 0.0 per unit of risk. If you would invest 1,768,541 in WONIK Materials CoLtd on October 22, 2024 and sell it today you would earn a total of 68,459 from holding WONIK Materials CoLtd or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WONIK Materials CoLtd vs. Ecopro Co
Performance |
| Timeline |
| WONIK Materials CoLtd |
| Ecopro |
WONIK Materials and Ecopro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WONIK Materials and Ecopro
The main advantage of trading using opposite WONIK Materials and Ecopro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WONIK Materials position performs unexpectedly, Ecopro 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 Ecopro will offset losses from the drop in Ecopro's long position.| WONIK Materials vs. Soulbrain Holdings Co | WONIK Materials vs. Wonik Ips Co | WONIK Materials vs. TES Co | WONIK Materials vs. Suprema |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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