Correlation Between Shinsegae Information and Woori Financial
Can any of the company-specific risk be diversified away by investing in both Shinsegae Information 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 Shinsegae Information and Woori Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinsegae Information Communication and Woori Financial Group, you can compare the effects of market volatilities on Shinsegae Information 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 Shinsegae Information with a short position of Woori Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Information and Woori Financial.
Diversification Opportunities for Shinsegae Information and Woori Financial
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinsegae and Woori is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Information Communic 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 Shinsegae Information 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 Shinsegae Information Communication 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 Shinsegae Information i.e., Shinsegae Information and Woori Financial go up and down completely randomly.
Pair Corralation between Shinsegae Information and Woori Financial
Assuming the 90 days trading horizon Shinsegae Information is expected to generate 8.45 times less return on investment than Woori Financial. In addition to that, Shinsegae Information is 1.76 times more volatile than Woori Financial Group. It trades about 0.01 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 1,014,423 in Woori Financial Group on November 27, 2024 and sell it today you would earn a total of 727,577 from holding Woori Financial Group or generate 71.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinsegae Information Communic vs. Woori Financial Group
Performance |
| Timeline |
| Shinsegae Information |
| Woori Financial Group |
Shinsegae Information and Woori Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Information and Woori Financial
The main advantage of trading using opposite Shinsegae Information and Woori Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Information 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.| Shinsegae Information vs. iNtRON Biotechnology | Shinsegae Information vs. Handok Clean Tech | Shinsegae Information vs. Kukil Metal Co | Shinsegae Information vs. Jahwa Electronics Co |
| Woori Financial vs. Hanil Chemical Ind | Woori Financial vs. Youngbo Chemical Co | Woori Financial vs. Daejung Chemicals Metals | Woori Financial vs. Dongil Metal 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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