Correlation Between CU Tech and Wonil Special
Can any of the company-specific risk be diversified away by investing in both CU Tech and Wonil Special 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 CU Tech and Wonil Special into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CU Tech Corp and Wonil Special Steel, you can compare the effects of market volatilities on CU Tech and Wonil Special 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 CU Tech with a short position of Wonil Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of CU Tech and Wonil Special.
Diversification Opportunities for CU Tech and Wonil Special
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 376290 and Wonil is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding CU Tech Corp and Wonil Special Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonil Special Steel and CU Tech 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 CU Tech Corp are associated (or correlated) with Wonil Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonil Special Steel has no effect on the direction of CU Tech i.e., CU Tech and Wonil Special go up and down completely randomly.
Pair Corralation between CU Tech and Wonil Special
Assuming the 90 days trading horizon CU Tech Corp is expected to under-perform the Wonil Special. In addition to that, CU Tech is 1.03 times more volatile than Wonil Special Steel. It trades about -0.21 of its total potential returns per unit of risk. Wonil Special Steel is currently generating about -0.2 per unit of volatility. If you would invest 734,000 in Wonil Special Steel on September 12, 2024 and sell it today you would lose (50,000) from holding Wonil Special Steel or give up 6.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CU Tech Corp vs. Wonil Special Steel
Performance |
| Timeline |
| CU Tech Corp |
| Wonil Special Steel |
CU Tech and Wonil Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CU Tech and Wonil Special
The main advantage of trading using opposite CU Tech and Wonil Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CU Tech position performs unexpectedly, Wonil Special 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 Wonil Special will offset losses from the drop in Wonil Special's long position.| CU Tech vs. Dongil Metal Co | CU Tech vs. Hanjoo Light Metal | CU Tech vs. Youngsin Metal Industrial | CU Tech vs. Kbi Metal Co |
| Wonil Special vs. LG Chemicals | Wonil Special vs. POSCO Holdings | Wonil Special vs. Hanwha Solutions | Wonil Special vs. Lotte Chemical Corp |
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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