Correlation Between THiRA-UTECH and Woorim Machinery
Can any of the company-specific risk be diversified away by investing in both THiRA-UTECH and Woorim Machinery 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 THiRA-UTECH and Woorim Machinery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THiRA UTECH LTD and Woorim Machinery Co, you can compare the effects of market volatilities on THiRA-UTECH and Woorim Machinery 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 THiRA-UTECH with a short position of Woorim Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of THiRA-UTECH and Woorim Machinery.
Diversification Opportunities for THiRA-UTECH and Woorim Machinery
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between THiRA-UTECH and Woorim is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding THiRA UTECH LTD and Woorim Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woorim Machinery and THiRA-UTECH 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 THiRA UTECH LTD are associated (or correlated) with Woorim Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woorim Machinery has no effect on the direction of THiRA-UTECH i.e., THiRA-UTECH and Woorim Machinery go up and down completely randomly.
Pair Corralation between THiRA-UTECH and Woorim Machinery
Assuming the 90 days trading horizon THiRA UTECH LTD is expected to generate 1.38 times more return on investment than Woorim Machinery. However, THiRA-UTECH is 1.38 times more volatile than Woorim Machinery Co. It trades about 0.05 of its potential returns per unit of risk. Woorim Machinery Co is currently generating about 0.01 per unit of risk. If you would invest 231,333 in THiRA UTECH LTD on September 14, 2024 and sell it today you would earn a total of 244,167 from holding THiRA UTECH LTD or generate 105.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
THiRA UTECH LTD vs. Woorim Machinery Co
Performance |
| Timeline |
| THiRA UTECH LTD |
| Woorim Machinery |
THiRA-UTECH and Woorim Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THiRA-UTECH and Woorim Machinery
The main advantage of trading using opposite THiRA-UTECH and Woorim Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THiRA-UTECH position performs unexpectedly, Woorim Machinery 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 Woorim Machinery will offset losses from the drop in Woorim Machinery's long position.| THiRA-UTECH vs. Kakao Games Corp | THiRA-UTECH vs. Devsisters corporation | THiRA-UTECH vs. Konan Technology | THiRA-UTECH vs. Nice Information Telecommunication |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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