Correlation Between Dongwoo Farm and Wing Yip
Can any of the company-specific risk be diversified away by investing in both Dongwoo Farm and Wing Yip 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 Dongwoo Farm and Wing Yip into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongwoo Farm To and Wing Yip Food, you can compare the effects of market volatilities on Dongwoo Farm and Wing Yip 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 Dongwoo Farm with a short position of Wing Yip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwoo Farm and Wing Yip.
Diversification Opportunities for Dongwoo Farm and Wing Yip
-0.96 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dongwoo and Wing is -0.96. Overlapping area represents the amount of risk that can be diversified away by holding Dongwoo Farm To and Wing Yip Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wing Yip Food and Dongwoo 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 Dongwoo Farm To are associated (or correlated) with Wing Yip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wing Yip Food has no effect on the direction of Dongwoo Farm i.e., Dongwoo Farm and Wing Yip go up and down completely randomly.
Pair Corralation between Dongwoo Farm and Wing Yip
Assuming the 90 days trading horizon Dongwoo Farm To is expected to under-perform the Wing Yip. But the stock apears to be less risky and, when comparing its historical volatility, Dongwoo Farm To is 8.25 times less risky than Wing Yip. The stock trades about -0.28 of its potential returns per unit of risk. The Wing Yip Food is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 121,300 in Wing Yip Food on January 31, 2024 and sell it today you would earn a total of 51,300 from holding Wing Yip Food or generate 42.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Dongwoo Farm To vs. Wing Yip Food
Performance |
Timeline |
Dongwoo Farm To |
Wing Yip Food |
Dongwoo Farm and Wing Yip Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dongwoo Farm and Wing Yip
The main advantage of trading using opposite Dongwoo Farm and Wing Yip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwoo Farm position performs unexpectedly, Wing Yip 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 Wing Yip will offset losses from the drop in Wing Yip's long position.Dongwoo Farm vs. Nice Information Telecommunication | Dongwoo Farm vs. Iljin Display | Dongwoo Farm vs. Shinsegae Information Communication | Dongwoo Farm vs. DONGKUK TED METAL |
Wing Yip vs. KMH Hitech Co | Wing Yip vs. Amogreentech Co | Wing Yip vs. Seoyon Topmetal Co | Wing Yip vs. Sungchang Autotech Co |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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