Correlation Between Hanjoo Light and Woori Financial
Can any of the company-specific risk be diversified away by investing in both Hanjoo Light 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 Hanjoo Light and Woori Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanjoo Light Metal and Woori Financial Group, you can compare the effects of market volatilities on Hanjoo Light 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 Hanjoo Light with a short position of Woori Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjoo Light and Woori Financial.
Diversification Opportunities for Hanjoo Light and Woori Financial
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hanjoo and Woori is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Hanjoo Light Metal 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 Hanjoo Light 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 Hanjoo Light Metal 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 Hanjoo Light i.e., Hanjoo Light and Woori Financial go up and down completely randomly.
Pair Corralation between Hanjoo Light and Woori Financial
Assuming the 90 days trading horizon Hanjoo Light Metal is expected to under-perform the Woori Financial. In addition to that, Hanjoo Light is 2.77 times more volatile than Woori Financial Group. It trades about -0.05 of its total potential returns per unit of risk. Woori Financial Group is currently generating about 0.06 per unit of volatility. If you would invest 1,103,140 in Woori Financial Group on October 16, 2024 and sell it today you would earn a total of 452,860 from holding Woori Financial Group or generate 41.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjoo Light Metal vs. Woori Financial Group
Performance |
| Timeline |
| Hanjoo Light Metal |
| Woori Financial Group |
Hanjoo Light and Woori Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjoo Light and Woori Financial
The main advantage of trading using opposite Hanjoo Light and Woori Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjoo Light 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.| Hanjoo Light vs. SK Telecom Co | Hanjoo Light vs. Foodnamoo | Hanjoo Light vs. Nice Information Telecommunication | Hanjoo Light vs. CJ Seafood Corp |
| Woori Financial vs. Daejung Chemicals Metals | Woori Financial vs. InfoBank | Woori Financial vs. Hanjoo Light Metal | Woori Financial vs. Incar Financial Service |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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