Correlation Between Orbitech and Woori Financial
Can any of the company-specific risk be diversified away by investing in both Orbitech 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 Orbitech and Woori Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orbitech Co and Woori Financial Group, you can compare the effects of market volatilities on Orbitech 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 Orbitech with a short position of Woori Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orbitech and Woori Financial.
Diversification Opportunities for Orbitech and Woori Financial
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Orbitech and Woori is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Orbitech 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 Orbitech 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 Orbitech 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 Orbitech i.e., Orbitech and Woori Financial go up and down completely randomly.
Pair Corralation between Orbitech and Woori Financial
Assuming the 90 days trading horizon Orbitech Co is expected to under-perform the Woori Financial. In addition to that, Orbitech is 2.07 times more volatile than Woori Financial Group. It trades about -0.24 of its total potential returns per unit of risk. Woori Financial Group is currently generating about -0.1 per unit of volatility. If you would invest 1,610,000 in Woori Financial Group on September 12, 2024 and sell it today you would lose (66,000) from holding Woori Financial Group or give up 4.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orbitech Co vs. Woori Financial Group
Performance |
| Timeline |
| Orbitech |
| Woori Financial Group |
Orbitech and Woori Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orbitech and Woori Financial
The main advantage of trading using opposite Orbitech and Woori Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orbitech 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.| Orbitech vs. Korea New Network | Orbitech vs. Solution Advanced Technology | Orbitech vs. Busan Industrial Co | Orbitech vs. Busan Ind |
| Woori Financial vs. DB Insurance Co | Woori Financial vs. Pureun Mutual Savings | Woori Financial vs. Shinhan Financial Group | Woori Financial vs. iNtRON Biotechnology |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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