Correlation Between DSC Investment and Woori Technology
Can any of the company-specific risk be diversified away by investing in both DSC Investment 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 DSC Investment and Woori Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DSC Investment and Woori Technology Investment, you can compare the effects of market volatilities on DSC Investment 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 DSC Investment with a short position of Woori Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSC Investment and Woori Technology.
Diversification Opportunities for DSC Investment and Woori Technology
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DSC and Woori is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding DSC Investment and Woori Technology Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Technology Inv and DSC Investment 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 DSC Investment 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 Inv has no effect on the direction of DSC Investment i.e., DSC Investment and Woori Technology go up and down completely randomly.
Pair Corralation between DSC Investment and Woori Technology
Assuming the 90 days trading horizon DSC Investment is expected to generate 0.66 times more return on investment than Woori Technology. However, DSC Investment is 1.52 times less risky than Woori Technology. It trades about 0.14 of its potential returns per unit of risk. Woori Technology Investment is currently generating about -0.31 per unit of risk. If you would invest 278,500 in DSC Investment on September 13, 2024 and sell it today you would earn a total of 23,500 from holding DSC Investment or generate 8.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DSC Investment vs. Woori Technology Investment
Performance |
| Timeline |
| DSC Investment |
| Woori Technology Inv |
DSC Investment and Woori Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DSC Investment and Woori Technology
The main advantage of trading using opposite DSC Investment and Woori Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DSC Investment 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.| DSC Investment vs. Nh Investment And | DSC Investment vs. Hanwha InvestmentSecurities Co | DSC Investment vs. Solution Advanced Technology | DSC Investment vs. Busan Industrial Co |
| Woori Technology vs. KB Financial Group | Woori Technology vs. Shinhan Financial Group | Woori Technology vs. Hana Financial | Woori Technology vs. Woori Financial Group |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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