Correlation Between SK Chemicals and Woori Financial
Can any of the company-specific risk be diversified away by investing in both SK Chemicals 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 SK Chemicals and Woori Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Chemicals Co and Woori Financial Group, you can compare the effects of market volatilities on SK Chemicals 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 SK Chemicals with a short position of Woori Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Chemicals and Woori Financial.
Diversification Opportunities for SK Chemicals and Woori Financial
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between 28513K and Woori is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding SK Chemicals 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 SK Chemicals 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 SK Chemicals 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 SK Chemicals i.e., SK Chemicals and Woori Financial go up and down completely randomly.
Pair Corralation between SK Chemicals and Woori Financial
Assuming the 90 days trading horizon SK Chemicals Co is expected to under-perform the Woori Financial. In addition to that, SK Chemicals is 1.68 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 -0.04 per unit of volatility. If you would invest 1,567,000 in Woori Financial Group on October 15, 2024 and sell it today you would lose (17,000) from holding Woori Financial Group or give up 1.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Chemicals Co vs. Woori Financial Group
Performance |
| Timeline |
| SK Chemicals |
| Woori Financial Group |
SK Chemicals and Woori Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Chemicals and Woori Financial
The main advantage of trading using opposite SK Chemicals and Woori Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Chemicals 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.| SK Chemicals vs. Korean Reinsurance Co | SK Chemicals vs. Jb Financial | SK Chemicals vs. Lotte Non Life Insurance | SK Chemicals vs. Sungchang Autotech Co |
| Woori Financial vs. Ssangyong Materials Corp | Woori Financial vs. Green Cross Medical | Woori Financial vs. WONIK Materials CoLtd | Woori Financial vs. Union Materials Corp |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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