Correlation Between Wintec and Songwon Industrial
Can any of the company-specific risk be diversified away by investing in both Wintec and Songwon Industrial 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 Wintec and Songwon Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wintec Co and Songwon Industrial Co, you can compare the effects of market volatilities on Wintec and Songwon Industrial 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 Wintec with a short position of Songwon Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wintec and Songwon Industrial.
Diversification Opportunities for Wintec and Songwon Industrial
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wintec and Songwon is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Wintec Co and Songwon Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Songwon Industrial and Wintec 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 Wintec Co are associated (or correlated) with Songwon Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Songwon Industrial has no effect on the direction of Wintec i.e., Wintec and Songwon Industrial go up and down completely randomly.
Pair Corralation between Wintec and Songwon Industrial
Assuming the 90 days trading horizon Wintec Co is expected to generate 1.32 times more return on investment than Songwon Industrial. However, Wintec is 1.32 times more volatile than Songwon Industrial Co. It trades about 0.02 of its potential returns per unit of risk. Songwon Industrial Co is currently generating about -0.31 per unit of risk. If you would invest 272,000 in Wintec Co on September 5, 2024 and sell it today you would lose (500.00) from holding Wintec Co or give up 0.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wintec Co vs. Songwon Industrial Co
Performance |
| Timeline |
| Wintec |
| Songwon Industrial |
Wintec and Songwon Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wintec and Songwon Industrial
The main advantage of trading using opposite Wintec and Songwon Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wintec position performs unexpectedly, Songwon Industrial 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 Songwon Industrial will offset losses from the drop in Songwon Industrial's long position.| Wintec vs. Songwon Industrial Co | Wintec vs. Hanjin Transportation Co | Wintec vs. Konan Technology | Wintec vs. Orbitech Co |
| Songwon Industrial vs. AptaBio Therapeutics | Songwon Industrial vs. Daewoo SBI SPAC | Songwon Industrial vs. Dream Security co | Songwon Industrial vs. Microfriend |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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