Correlation Between Dongwoo Farm and Woori Financial
Can any of the company-specific risk be diversified away by investing in both Dongwoo Farm 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 Dongwoo Farm and Woori Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongwoo Farm To and Woori Financial Group, you can compare the effects of market volatilities on Dongwoo Farm 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 Dongwoo Farm with a short position of Woori Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwoo Farm and Woori Financial.
Diversification Opportunities for Dongwoo Farm and Woori Financial
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dongwoo and Woori is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Dongwoo Farm To 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 Dongwoo Farm 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 Dongwoo Farm To 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 Dongwoo Farm i.e., Dongwoo Farm and Woori Financial go up and down completely randomly.
Pair Corralation between Dongwoo Farm and Woori Financial
Assuming the 90 days trading horizon Dongwoo Farm To is expected to under-perform the Woori Financial. In addition to that, Dongwoo Farm is 1.38 times more volatile than Woori Financial Group. It trades about -0.02 of its total potential returns per unit of risk. Woori Financial Group is currently generating about 0.44 per unit of volatility. If you would invest 1,526,000 in Woori Financial Group on November 4, 2024 and sell it today you would earn a total of 84,000 from holding Woori Financial Group or generate 5.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongwoo Farm To vs. Woori Financial Group
Performance |
| Timeline |
| Dongwoo Farm To |
| Woori Financial Group |
Dongwoo Farm and Woori Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwoo Farm and Woori Financial
The main advantage of trading using opposite Dongwoo Farm and Woori Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwoo Farm 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.| Dongwoo Farm vs. Dongil Metal Co | Dongwoo Farm vs. Heungkuk Metaltech CoLtd | Dongwoo Farm vs. Daiyang Metal Co | Dongwoo Farm vs. Hanjoo Light Metal |
| Woori Financial vs. ENF Technology Co | Woori Financial vs. FoodNamoo | Woori Financial vs. Sempio Foods Co | Woori Financial vs. Bosung Power Technology |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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