Correlation Between Dgb Financial and Woori Financial
Can any of the company-specific risk be diversified away by investing in both Dgb Financial 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 Dgb Financial and Woori Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dgb Financial and Woori Financial Group, you can compare the effects of market volatilities on Dgb Financial 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 Dgb Financial with a short position of Woori Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dgb Financial and Woori Financial.
Diversification Opportunities for Dgb Financial and Woori Financial
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dgb and Woori is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Dgb Financial 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 Dgb Financial 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 Dgb Financial 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 Dgb Financial i.e., Dgb Financial and Woori Financial go up and down completely randomly.
Pair Corralation between Dgb Financial and Woori Financial
Assuming the 90 days trading horizon Dgb Financial is expected to generate 0.53 times more return on investment than Woori Financial. However, Dgb Financial is 1.89 times less risky than Woori Financial. It trades about 0.28 of its potential returns per unit of risk. Woori Financial Group is currently generating about 0.11 per unit of risk. If you would invest 807,000 in Dgb Financial on September 3, 2024 and sell it today you would earn a total of 80,000 from holding Dgb Financial or generate 9.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dgb Financial vs. Woori Financial Group
Performance |
| Timeline |
| Dgb Financial |
| Woori Financial Group |
Dgb Financial and Woori Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dgb Financial and Woori Financial
The main advantage of trading using opposite Dgb Financial and Woori Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dgb Financial 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.| Dgb Financial vs. Taegu Broadcasting | Dgb Financial vs. LG Display Co | Dgb Financial vs. Dongbang Transport Logistics | Dgb Financial vs. Display Tech Co |
| Woori Financial vs. Finebesteel | Woori Financial vs. Shin Steel Co | Woori Financial vs. Fine Besteel Co | Woori Financial vs. Hanil Iron Steel |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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