Correlation Between Amogreentech and Woori Technology
Can any of the company-specific risk be diversified away by investing in both Amogreentech 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 Amogreentech and Woori Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amogreentech Co and Woori Technology, you can compare the effects of market volatilities on Amogreentech 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 Amogreentech with a short position of Woori Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amogreentech and Woori Technology.
Diversification Opportunities for Amogreentech and Woori Technology
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amogreentech and Woori is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Amogreentech Co and Woori Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Technology and Amogreentech 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 Amogreentech 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 Amogreentech i.e., Amogreentech and Woori Technology go up and down completely randomly.
Pair Corralation between Amogreentech and Woori Technology
Assuming the 90 days trading horizon Amogreentech Co is expected to under-perform the Woori Technology. But the stock apears to be less risky and, when comparing its historical volatility, Amogreentech Co is 1.37 times less risky than Woori Technology. The stock trades about -0.08 of its potential returns per unit of risk. The Woori Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 144,900 in Woori Technology on August 28, 2024 and sell it today you would earn a total of 94,100 from holding Woori Technology or generate 64.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amogreentech Co vs. Woori Technology
Performance |
| Timeline |
| Amogreentech |
| Woori Technology |
Amogreentech and Woori Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amogreentech and Woori Technology
The main advantage of trading using opposite Amogreentech and Woori Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amogreentech 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.The idea behind Amogreentech Co and Woori Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Woori Technology vs. Korea Real Estate | Woori Technology vs. Korea Ratings Co | Woori Technology vs. IQuest Co | Woori Technology vs. Wonbang Tech 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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