Correlation Between WOORI FIN and FRESENIUS SE+CO
Can any of the company-specific risk be diversified away by investing in both WOORI FIN and FRESENIUS SE+CO 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 FRESENIUS SE+CO 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 FRESENIUS SECO ADR, you can compare the effects of market volatilities on WOORI FIN and FRESENIUS SE+CO 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 FRESENIUS SE+CO. Check out your portfolio center. Please also check ongoing floating volatility patterns of WOORI FIN and FRESENIUS SE+CO.
Diversification Opportunities for WOORI FIN and FRESENIUS SE+CO
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WOORI and FRESENIUS is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding WOORI FIN GRP and FRESENIUS SECO ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FRESENIUS SECO ADR 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 FRESENIUS SE+CO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FRESENIUS SECO ADR has no effect on the direction of WOORI FIN i.e., WOORI FIN and FRESENIUS SE+CO go up and down completely randomly.
Pair Corralation between WOORI FIN and FRESENIUS SE+CO
Assuming the 90 days trading horizon WOORI FIN GRP is expected to generate 0.56 times more return on investment than FRESENIUS SE+CO. However, WOORI FIN GRP is 1.78 times less risky than FRESENIUS SE+CO. It trades about 0.52 of its potential returns per unit of risk. FRESENIUS SECO ADR is currently generating about -0.06 per unit of risk. If you would invest 2,920 in WOORI FIN GRP on September 1, 2024 and sell it today you would earn a total of 340.00 from holding WOORI FIN GRP or generate 11.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WOORI FIN GRP vs. FRESENIUS SECO ADR
Performance |
| Timeline |
| WOORI FIN GRP |
| FRESENIUS SECO ADR |
WOORI FIN and FRESENIUS SE+CO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WOORI FIN and FRESENIUS SE+CO
The main advantage of trading using opposite WOORI FIN and FRESENIUS SE+CO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WOORI FIN position performs unexpectedly, FRESENIUS SE+CO 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 FRESENIUS SE+CO will offset losses from the drop in FRESENIUS SE+CO's long position.| WOORI FIN vs. SIDETRADE EO 1 | WOORI FIN vs. REVO INSURANCE SPA | WOORI FIN vs. Direct Line Insurance | WOORI FIN vs. Japan Post Insurance |
| FRESENIUS SE+CO vs. Richter Gedeon Vegyszeti | FRESENIUS SE+CO vs. Charoen Pokphand Foods | FRESENIUS SE+CO vs. Superior Plus Corp | FRESENIUS SE+CO vs. Origin Agritech |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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