Correlation Between Golden Bridge and Woori Financial
Can any of the company-specific risk be diversified away by investing in both Golden Bridge and Woori Financial 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 Golden Bridge and Woori Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Bridge Investment and Woori Financial Group, you can compare the effects of market volatilities on Golden Bridge and Woori Financial 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 Golden Bridge with a short position of Woori Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Bridge and Woori Financial.
Diversification Opportunities for Golden Bridge and Woori Financial
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Golden and Woori is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Golden Bridge Investment and Woori Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Financial Group and Golden Bridge 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 Golden Bridge Investment are associated (or correlated) with Woori Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woori Financial Group has no effect on the direction of Golden Bridge i.e., Golden Bridge and Woori Financial go up and down completely randomly.
Pair Corralation between Golden Bridge and Woori Financial
Assuming the 90 days trading horizon Golden Bridge Investment is expected to under-perform the Woori Financial. In addition to that, Golden Bridge is 1.33 times more volatile than Woori Financial Group. It trades about -0.04 of its total potential returns per unit of risk. Woori Financial Group is currently generating about 0.08 per unit of volatility. If you would invest 1,561,000 in Woori Financial Group on October 27, 2024 and sell it today you would earn a total of 14,000 from holding Woori Financial Group or generate 0.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Bridge Investment vs. Woori Financial Group
Performance |
| Timeline |
| Golden Bridge Investment |
| Woori Financial Group |
Golden Bridge and Woori Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Bridge and Woori Financial
The main advantage of trading using opposite Golden Bridge and Woori Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Bridge position performs unexpectedly, Woori Financial 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 Woori Financial will offset losses from the drop in Woori Financial's long position.| Golden Bridge vs. SEOJEON ELECTRIC MACHINERY | Golden Bridge vs. Hyundai Engineering Construction | Golden Bridge vs. Dongbang Ship Machinery | Golden Bridge vs. Korea Shipbuilding Offshore |
| Woori Financial vs. Shinhan Financial Group | Woori Financial vs. Hana Financial | Woori Financial vs. KakaoBank Corp | Woori Financial vs. Industrial Bank |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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