Correlation Between Wireless Power and Korea Steel
Can any of the company-specific risk be diversified away by investing in both Wireless Power and Korea Steel 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 Wireless Power and Korea Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wireless Power Amplifier and Korea Steel Co, you can compare the effects of market volatilities on Wireless Power and Korea Steel 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 Wireless Power with a short position of Korea Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wireless Power and Korea Steel.
Diversification Opportunities for Wireless Power and Korea Steel
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wireless and Korea is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Wireless Power Amplifier and Korea Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Steel and Wireless Power 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 Wireless Power Amplifier are associated (or correlated) with Korea Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Steel has no effect on the direction of Wireless Power i.e., Wireless Power and Korea Steel go up and down completely randomly.
Pair Corralation between Wireless Power and Korea Steel
Assuming the 90 days trading horizon Wireless Power Amplifier is expected to generate 2.5 times more return on investment than Korea Steel. However, Wireless Power is 2.5 times more volatile than Korea Steel Co. It trades about 0.04 of its potential returns per unit of risk. Korea Steel Co is currently generating about -0.02 per unit of risk. If you would invest 297,000 in Wireless Power Amplifier on November 1, 2024 and sell it today you would earn a total of 105,000 from holding Wireless Power Amplifier or generate 35.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wireless Power Amplifier vs. Korea Steel Co
Performance |
| Timeline |
| Wireless Power Amplifier |
| Korea Steel |
Wireless Power and Korea Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wireless Power and Korea Steel
The main advantage of trading using opposite Wireless Power and Korea Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wireless Power position performs unexpectedly, Korea Steel 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 Korea Steel will offset losses from the drop in Korea Steel's long position.| Wireless Power vs. TOPMATERIAL LTD | Wireless Power vs. Hannong Chemicals | Wireless Power vs. Hana Materials | Wireless Power vs. Kukdong Oil Chemicals |
| Korea Steel vs. MediaZen | Korea Steel vs. TJ media Co | Korea Steel vs. DC Media Co | Korea Steel vs. Barunson Entertainment Arts |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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