Correlation Between InfoBank and Woori Financial
Can any of the company-specific risk be diversified away by investing in both InfoBank 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 InfoBank and Woori Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InfoBank and Woori Financial Group, you can compare the effects of market volatilities on InfoBank 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 InfoBank with a short position of Woori Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of InfoBank and Woori Financial.
Diversification Opportunities for InfoBank and Woori Financial
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between InfoBank and Woori is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding InfoBank 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 InfoBank 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 InfoBank 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 InfoBank i.e., InfoBank and Woori Financial go up and down completely randomly.
Pair Corralation between InfoBank and Woori Financial
Assuming the 90 days trading horizon InfoBank is expected to under-perform the Woori Financial. In addition to that, InfoBank is 2.16 times more volatile than Woori Financial Group. It trades about -0.16 of its total potential returns per unit of risk. Woori Financial Group is currently generating about -0.03 per unit of volatility. If you would invest 1,567,000 in Woori Financial Group on October 16, 2024 and sell it today you would lose (11,000) from holding Woori Financial Group or give up 0.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
InfoBank vs. Woori Financial Group
Performance |
| Timeline |
| InfoBank |
| Woori Financial Group |
InfoBank and Woori Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InfoBank and Woori Financial
The main advantage of trading using opposite InfoBank and Woori Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InfoBank 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.| InfoBank vs. Industrial Bank | InfoBank vs. Samsung Life Insurance | InfoBank vs. DB Insurance Co | InfoBank vs. Jeju Bank |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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