Correlation Between Formetal and Woori Technology
Can any of the company-specific risk be diversified away by investing in both Formetal and Woori Technology 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 Woori Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Formetal Co and Woori Technology, you can compare the effects of market volatilities on Formetal and Woori Technology 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 Woori Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Formetal and Woori Technology.
Diversification Opportunities for Formetal and Woori Technology
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Formetal and Woori is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Formetal Co and Woori Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Technology 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 Woori Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woori Technology has no effect on the direction of Formetal i.e., Formetal and Woori Technology go up and down completely randomly.
Pair Corralation between Formetal and Woori Technology
Assuming the 90 days trading horizon Formetal is expected to generate 3.65 times less return on investment than Woori Technology. But when comparing it to its historical volatility, Formetal Co is 1.6 times less risky than Woori Technology. It trades about 0.01 of its potential returns per unit of risk. Woori Technology is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 131,000 in Woori Technology on September 13, 2024 and sell it today you would earn a total of 39,300 from holding Woori Technology or generate 30.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Formetal Co vs. Woori Technology
Performance |
| Timeline |
| Formetal |
| Woori Technology |
Formetal and Woori Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Formetal and Woori Technology
The main advantage of trading using opposite Formetal and Woori Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Formetal position performs unexpectedly, Woori Technology 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 Woori Technology will offset losses from the drop in Woori Technology's long position.| Formetal vs. Rainbow Robotics | Formetal vs. COWINTECH Co | Formetal vs. CS BEARING CoLtd | Formetal vs. Young Poong Precision |
| Woori Technology vs. Dongwoo Farm To | Woori Technology vs. KEPCO Engineering Construction | Woori Technology vs. Kumho Industrial Co | Woori Technology vs. Formetal 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |