Correlation Between WooDeumGee Farm and SKONEC Entertainment
Can any of the company-specific risk be diversified away by investing in both WooDeumGee Farm and SKONEC Entertainment 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 WooDeumGee Farm and SKONEC Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WooDeumGee Farm Co, and SKONEC Entertainment Co, you can compare the effects of market volatilities on WooDeumGee Farm and SKONEC Entertainment 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 WooDeumGee Farm with a short position of SKONEC Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of WooDeumGee Farm and SKONEC Entertainment.
Diversification Opportunities for WooDeumGee Farm and SKONEC Entertainment
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WooDeumGee and SKONEC is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding WooDeumGee Farm Co, and SKONEC Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SKONEC Entertainment and WooDeumGee Farm 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 WooDeumGee Farm Co, are associated (or correlated) with SKONEC Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SKONEC Entertainment has no effect on the direction of WooDeumGee Farm i.e., WooDeumGee Farm and SKONEC Entertainment go up and down completely randomly.
Pair Corralation between WooDeumGee Farm and SKONEC Entertainment
Assuming the 90 days trading horizon WooDeumGee Farm Co, is expected to generate 0.86 times more return on investment than SKONEC Entertainment. However, WooDeumGee Farm Co, is 1.16 times less risky than SKONEC Entertainment. It trades about -0.09 of its potential returns per unit of risk. SKONEC Entertainment Co is currently generating about -0.27 per unit of risk. If you would invest 185,600 in WooDeumGee Farm Co, on August 29, 2024 and sell it today you would lose (5,900) from holding WooDeumGee Farm Co, or give up 3.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WooDeumGee Farm Co, vs. SKONEC Entertainment Co
Performance |
| Timeline |
| WooDeumGee Farm Co, |
| SKONEC Entertainment |
WooDeumGee Farm and SKONEC Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WooDeumGee Farm and SKONEC Entertainment
The main advantage of trading using opposite WooDeumGee Farm and SKONEC Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WooDeumGee Farm position performs unexpectedly, SKONEC Entertainment 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 SKONEC Entertainment will offset losses from the drop in SKONEC Entertainment's long position.| WooDeumGee Farm vs. Samsung Electronics Co | WooDeumGee Farm vs. Samsung Electronics Co | WooDeumGee Farm vs. LG Energy Solution | WooDeumGee Farm vs. SK Hynix |
| SKONEC Entertainment vs. Busan Industrial Co | SKONEC Entertainment vs. Busan Ind | SKONEC Entertainment vs. Shinhan WTI Futures | SKONEC Entertainment vs. Finebesteel |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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