Correlation Between Namhwa Industrial and Woori Financial
Can any of the company-specific risk be diversified away by investing in both Namhwa Industrial 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 Namhwa Industrial and Woori Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Namhwa Industrial Co and Woori Financial Group, you can compare the effects of market volatilities on Namhwa Industrial 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 Namhwa Industrial with a short position of Woori Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Namhwa Industrial and Woori Financial.
Diversification Opportunities for Namhwa Industrial and Woori Financial
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Namhwa and Woori is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Namhwa Industrial 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 Namhwa Industrial 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 Namhwa Industrial 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 Namhwa Industrial i.e., Namhwa Industrial and Woori Financial go up and down completely randomly.
Pair Corralation between Namhwa Industrial and Woori Financial
Assuming the 90 days trading horizon Namhwa Industrial is expected to generate 12.17 times less return on investment than Woori Financial. In addition to that, Namhwa Industrial is 4.08 times more volatile than Woori Financial Group. It trades about 0.0 of its total potential returns per unit of risk. Woori Financial Group is currently generating about 0.24 per unit of volatility. If you would invest 1,539,000 in Woori Financial Group on October 28, 2024 and sell it today you would earn a total of 36,000 from holding Woori Financial Group or generate 2.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Namhwa Industrial Co vs. Woori Financial Group
Performance |
| Timeline |
| Namhwa Industrial |
| Woori Financial Group |
Namhwa Industrial and Woori Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Namhwa Industrial and Woori Financial
The main advantage of trading using opposite Namhwa Industrial and Woori Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Namhwa Industrial 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.| Namhwa Industrial vs. Global Standard Technology | Namhwa Industrial vs. Daou Technology | Namhwa Industrial vs. AeroSpace Technology of | Namhwa Industrial vs. Daishin Information Communications |
| Woori Financial vs. Jin Air Co | Woori Financial vs. Atinum Investment Co | Woori Financial vs. NH Investment Securities | Woori Financial vs. E Investment Development |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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