Correlation Between CJ CheilJedang and Woori Financial
Can any of the company-specific risk be diversified away by investing in both CJ CheilJedang 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 CJ CheilJedang and Woori Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CJ CheilJedang Corp and Woori Financial Group, you can compare the effects of market volatilities on CJ CheilJedang 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 CJ CheilJedang with a short position of Woori Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CJ CheilJedang and Woori Financial.
Diversification Opportunities for CJ CheilJedang and Woori Financial
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 097955 and Woori is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding CJ CheilJedang Corp 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 CJ CheilJedang 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 CJ CheilJedang Corp 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 CJ CheilJedang i.e., CJ CheilJedang and Woori Financial go up and down completely randomly.
Pair Corralation between CJ CheilJedang and Woori Financial
Assuming the 90 days trading horizon CJ CheilJedang Corp is expected to under-perform the Woori Financial. But the stock apears to be less risky and, when comparing its historical volatility, CJ CheilJedang Corp is 1.2 times less risky than Woori Financial. The stock trades about -0.04 of its potential returns per unit of risk. The Woori Financial Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,659,000 in Woori Financial Group on August 24, 2024 and sell it today you would earn a total of 20,000 from holding Woori Financial Group or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CJ CheilJedang Corp vs. Woori Financial Group
Performance |
| Timeline |
| CJ CheilJedang Corp |
| Woori Financial Group |
CJ CheilJedang and Woori Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CJ CheilJedang and Woori Financial
The main advantage of trading using opposite CJ CheilJedang and Woori Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CJ CheilJedang 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.| CJ CheilJedang vs. Hwangkum Steel Technology | CJ CheilJedang vs. Amogreentech Co | CJ CheilJedang vs. Intellian Technologies | CJ CheilJedang vs. Neungyule Education |
| Woori Financial vs. Shinhan Financial Group | Woori Financial vs. Hana Financial | Woori Financial vs. KakaoBank Corp | Woori Financial vs. Industrial Bank |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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