Correlation Between Wing Yip and Dongwoo Farm
Can any of the company-specific risk be diversified away by investing in both Wing Yip and Dongwoo Farm 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 Wing Yip and Dongwoo Farm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wing Yip Food and Dongwoo Farm To, you can compare the effects of market volatilities on Wing Yip and Dongwoo Farm 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 Wing Yip with a short position of Dongwoo Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wing Yip and Dongwoo Farm.
Diversification Opportunities for Wing Yip and Dongwoo Farm
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wing and Dongwoo is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Wing Yip Food and Dongwoo Farm To in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwoo Farm To and Wing Yip 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 Wing Yip Food are associated (or correlated) with Dongwoo Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwoo Farm To has no effect on the direction of Wing Yip i.e., Wing Yip and Dongwoo Farm go up and down completely randomly.
Pair Corralation between Wing Yip and Dongwoo Farm
Assuming the 90 days trading horizon Wing Yip Food is expected to generate 8.22 times more return on investment than Dongwoo Farm. However, Wing Yip is 8.22 times more volatile than Dongwoo Farm To. It trades about 0.07 of its potential returns per unit of risk. Dongwoo Farm To is currently generating about -0.17 per unit of risk. If you would invest 201,500 in Wing Yip Food on September 1, 2024 and sell it today you would earn a total of 9,500 from holding Wing Yip Food or generate 4.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wing Yip Food vs. Dongwoo Farm To
Performance |
| Timeline |
| Wing Yip Food |
| Dongwoo Farm To |
Wing Yip and Dongwoo Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wing Yip and Dongwoo Farm
The main advantage of trading using opposite Wing Yip and Dongwoo Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wing Yip position performs unexpectedly, Dongwoo Farm 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 Dongwoo Farm will offset losses from the drop in Dongwoo Farm's long position.| Wing Yip vs. Maeil Dairies Co | Wing Yip vs. Busan Industrial Co | Wing Yip vs. Busan Ind | Wing Yip vs. Mirae Asset Daewoo |
| Dongwoo Farm vs. Maeil Dairies Co | Dongwoo Farm vs. Busan Industrial Co | Dongwoo Farm vs. Busan Ind | Dongwoo Farm vs. Mirae Asset Daewoo |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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