Correlation Between Kbi Metal and Woori Financial
Can any of the company-specific risk be diversified away by investing in both Kbi Metal 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 Kbi Metal and Woori Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kbi Metal Co and Woori Financial Group, you can compare the effects of market volatilities on Kbi Metal 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 Kbi Metal with a short position of Woori Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kbi Metal and Woori Financial.
Diversification Opportunities for Kbi Metal and Woori Financial
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kbi and Woori is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Kbi Metal Co 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 Kbi Metal 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 Kbi Metal Co 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 Kbi Metal i.e., Kbi Metal and Woori Financial go up and down completely randomly.
Pair Corralation between Kbi Metal and Woori Financial
Assuming the 90 days trading horizon Kbi Metal Co is expected to generate 6.3 times more return on investment than Woori Financial. However, Kbi Metal is 6.3 times more volatile than Woori Financial Group. It trades about 0.23 of its potential returns per unit of risk. Woori Financial Group is currently generating about 0.01 per unit of risk. If you would invest 205,000 in Kbi Metal Co on October 20, 2024 and sell it today you would earn a total of 35,000 from holding Kbi Metal Co or generate 17.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kbi Metal Co vs. Woori Financial Group
Performance |
| Timeline |
| Kbi Metal |
| Woori Financial Group |
Kbi Metal and Woori Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kbi Metal and Woori Financial
The main advantage of trading using opposite Kbi Metal and Woori Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kbi Metal 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.| Kbi Metal vs. SungMoon Electronics Co | Kbi Metal vs. Kakao Games Corp | Kbi Metal vs. Sam Yang Foods | Kbi Metal vs. Cuckoo Electronics Co |
| Woori Financial vs. PNC Technologies co | Woori Financial vs. PH Tech Co | Woori Financial vs. Barunson Entertainment Arts | Woori Financial vs. Alton Sports CoLtd |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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