Correlation Between Wonik Ips and SFA Semicon
Can any of the company-specific risk be diversified away by investing in both Wonik Ips and SFA Semicon 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 Wonik Ips and SFA Semicon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wonik Ips Co and SFA Semicon Co, you can compare the effects of market volatilities on Wonik Ips and SFA Semicon 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 Wonik Ips with a short position of SFA Semicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonik Ips and SFA Semicon.
Diversification Opportunities for Wonik Ips and SFA Semicon
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Wonik and SFA is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Wonik Ips Co and SFA Semicon Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SFA Semicon and Wonik Ips 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 Wonik Ips Co are associated (or correlated) with SFA Semicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SFA Semicon has no effect on the direction of Wonik Ips i.e., Wonik Ips and SFA Semicon go up and down completely randomly.
Pair Corralation between Wonik Ips and SFA Semicon
Assuming the 90 days trading horizon Wonik Ips Co is expected to under-perform the SFA Semicon. In addition to that, Wonik Ips is 1.1 times more volatile than SFA Semicon Co. It trades about -0.25 of its total potential returns per unit of risk. SFA Semicon Co is currently generating about -0.15 per unit of volatility. If you would invest 349,500 in SFA Semicon Co on August 26, 2024 and sell it today you would lose (27,500) from holding SFA Semicon Co or give up 7.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wonik Ips Co vs. SFA Semicon Co
Performance |
| Timeline |
| Wonik Ips |
| SFA Semicon |
Wonik Ips and SFA Semicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonik Ips and SFA Semicon
The main advantage of trading using opposite Wonik Ips and SFA Semicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonik Ips position performs unexpectedly, SFA Semicon 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 SFA Semicon will offset losses from the drop in SFA Semicon's long position.The idea behind Wonik Ips Co and SFA Semicon Co 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.| SFA Semicon vs. Korea Real Estate | SFA Semicon vs. Korea Ratings Co | SFA Semicon vs. IQuest Co | SFA Semicon 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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