Correlation Between ADTechnology CoLtd and Woori Technology
Can any of the company-specific risk be diversified away by investing in both ADTechnology CoLtd 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 ADTechnology CoLtd and Woori Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADTechnology CoLtd and Woori Technology, you can compare the effects of market volatilities on ADTechnology CoLtd 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 ADTechnology CoLtd with a short position of Woori Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADTechnology CoLtd and Woori Technology.
Diversification Opportunities for ADTechnology CoLtd and Woori Technology
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between ADTechnology and Woori is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding ADTechnology CoLtd and Woori Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Technology and ADTechnology CoLtd 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 ADTechnology CoLtd 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 ADTechnology CoLtd i.e., ADTechnology CoLtd and Woori Technology go up and down completely randomly.
Pair Corralation between ADTechnology CoLtd and Woori Technology
Assuming the 90 days trading horizon ADTechnology CoLtd is expected to generate 1.46 times less return on investment than Woori Technology. In addition to that, ADTechnology CoLtd is 2.0 times more volatile than Woori Technology. It trades about 0.2 of its total potential returns per unit of risk. Woori Technology is currently generating about 0.57 per unit of volatility. If you would invest 168,700 in Woori Technology on November 1, 2024 and sell it today you would earn a total of 46,800 from holding Woori Technology or generate 27.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ADTechnology CoLtd vs. Woori Technology
Performance |
| Timeline |
| ADTechnology CoLtd |
| Woori Technology |
ADTechnology CoLtd and Woori Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADTechnology CoLtd and Woori Technology
The main advantage of trading using opposite ADTechnology CoLtd and Woori Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADTechnology CoLtd 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.| ADTechnology CoLtd vs. Samsung Electronics Co | ADTechnology CoLtd vs. Samsung Electronics Co | ADTechnology CoLtd vs. SK Hynix | ADTechnology CoLtd vs. HMM Co |
| Woori Technology vs. Solution Advanced Technology | Woori Technology vs. ADTechnology CoLtd | Woori Technology vs. Jin Air Co | Woori Technology vs. Seers Technology |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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