Correlation Between Formetal and Wonil Special
Can any of the company-specific risk be diversified away by investing in both Formetal and Wonil Special 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 Formetal and Wonil Special into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Formetal Co and Wonil Special Steel, you can compare the effects of market volatilities on Formetal and Wonil Special 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 Formetal with a short position of Wonil Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Formetal and Wonil Special.
Diversification Opportunities for Formetal and Wonil Special
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Formetal and Wonil is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Formetal Co and Wonil Special Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonil Special Steel and Formetal 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 Formetal Co are associated (or correlated) with Wonil Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonil Special Steel has no effect on the direction of Formetal i.e., Formetal and Wonil Special go up and down completely randomly.
Pair Corralation between Formetal and Wonil Special
Assuming the 90 days trading horizon Formetal Co is expected to generate 1.94 times more return on investment than Wonil Special. However, Formetal is 1.94 times more volatile than Wonil Special Steel. It trades about 0.01 of its potential returns per unit of risk. Wonil Special Steel is currently generating about -0.03 per unit of risk. If you would invest 362,031 in Formetal Co on October 13, 2024 and sell it today you would lose (10,031) from holding Formetal Co or give up 2.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Formetal Co vs. Wonil Special Steel
Performance |
| Timeline |
| Formetal |
| Wonil Special Steel |
Formetal and Wonil Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Formetal and Wonil Special
The main advantage of trading using opposite Formetal and Wonil Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Formetal position performs unexpectedly, Wonil Special 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 Wonil Special will offset losses from the drop in Wonil Special's long position.| Formetal vs. RFTech Co | Formetal vs. Kbi Metal Co | Formetal vs. Shinhan Inverse Copper | Formetal vs. SEOWONINTECHCoLtd |
| Wonil Special vs. Woori Technology Investment | Wonil Special vs. Coloray International Investment | Wonil Special vs. Formetal Co | Wonil Special vs. Heungkuk Metaltech CoLtd |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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