Correlation Between WOORI FIN and SIDETRADE
Can any of the company-specific risk be diversified away by investing in both WOORI FIN and SIDETRADE 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 WOORI FIN and SIDETRADE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WOORI FIN GRP and SIDETRADE EO 1, you can compare the effects of market volatilities on WOORI FIN and SIDETRADE 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 WOORI FIN with a short position of SIDETRADE. Check out your portfolio center. Please also check ongoing floating volatility patterns of WOORI FIN and SIDETRADE.
Diversification Opportunities for WOORI FIN and SIDETRADE
Very weak diversification
The 3 months correlation between WOORI and SIDETRADE is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding WOORI FIN GRP and SIDETRADE EO 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIDETRADE EO 1 and WOORI FIN 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 WOORI FIN GRP are associated (or correlated) with SIDETRADE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIDETRADE EO 1 has no effect on the direction of WOORI FIN i.e., WOORI FIN and SIDETRADE go up and down completely randomly.
Pair Corralation between WOORI FIN and SIDETRADE
Assuming the 90 days trading horizon WOORI FIN GRP is expected to generate 1.75 times more return on investment than SIDETRADE. However, WOORI FIN is 1.75 times more volatile than SIDETRADE EO 1. It trades about 0.04 of its potential returns per unit of risk. SIDETRADE EO 1 is currently generating about 0.05 per unit of risk. If you would invest 2,072 in WOORI FIN GRP on September 3, 2024 and sell it today you would earn a total of 1,148 from holding WOORI FIN GRP or generate 55.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.23% |
| Values | Daily Returns |
WOORI FIN GRP vs. SIDETRADE EO 1
Performance |
| Timeline |
| WOORI FIN GRP |
| SIDETRADE EO 1 |
WOORI FIN and SIDETRADE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WOORI FIN and SIDETRADE
The main advantage of trading using opposite WOORI FIN and SIDETRADE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WOORI FIN position performs unexpectedly, SIDETRADE 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 SIDETRADE will offset losses from the drop in SIDETRADE's long position.| WOORI FIN vs. Postal Savings Bank | WOORI FIN vs. CAIXABANK UNADR 13 | WOORI FIN vs. Superior Plus Corp | WOORI FIN vs. NMI Holdings |
| SIDETRADE vs. PSI Software AG | SIDETRADE vs. Consolidated Communications Holdings | SIDETRADE vs. BW OFFSHORE LTD | SIDETRADE vs. Citic Telecom International |
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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