Correlation Between Ray and Wonil Special
Can any of the company-specific risk be diversified away by investing in both Ray 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 Ray and Wonil Special into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ray Co and Wonil Special Steel, you can compare the effects of market volatilities on Ray 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 Ray with a short position of Wonil Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ray and Wonil Special.
Diversification Opportunities for Ray and Wonil Special
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ray and Wonil is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ray 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 Ray 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 Ray 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 Ray i.e., Ray and Wonil Special go up and down completely randomly.
Pair Corralation between Ray and Wonil Special
Assuming the 90 days trading horizon Ray Co is expected to under-perform the Wonil Special. In addition to that, Ray is 2.86 times more volatile than Wonil Special Steel. It trades about -0.12 of its total potential returns per unit of risk. Wonil Special Steel is currently generating about -0.04 per unit of volatility. If you would invest 855,174 in Wonil Special Steel on September 4, 2024 and sell it today you would lose (125,174) from holding Wonil Special Steel or give up 14.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ray Co vs. Wonil Special Steel
Performance |
| Timeline |
| Ray Co |
| Wonil Special Steel |
Ray and Wonil Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ray and Wonil Special
The main advantage of trading using opposite Ray and Wonil Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ray 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.| Ray vs. Taeyang Metal Industrial | Ray vs. Eugene Technology CoLtd | Ray vs. Daejung Chemicals Metals | Ray vs. Dong A Steel Technology |
| Wonil Special vs. Hanjin Transportation Co | Wonil Special vs. Hankook Furniture Co | Wonil Special vs. CU Tech Corp | Wonil Special vs. Woori 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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