Correlation Between WOORI FIN and Airports
Can any of the company-specific risk be diversified away by investing in both WOORI FIN and Airports 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 Airports 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 Airports of Thailand, you can compare the effects of market volatilities on WOORI FIN and Airports 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 Airports. Check out your portfolio center. Please also check ongoing floating volatility patterns of WOORI FIN and Airports.
Diversification Opportunities for WOORI FIN and Airports
Pay attention - limited upside
The 3 months correlation between WOORI and Airports is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding WOORI FIN GRP and Airports of Thailand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airports of Thailand 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 Airports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airports of Thailand has no effect on the direction of WOORI FIN i.e., WOORI FIN and Airports go up and down completely randomly.
Pair Corralation between WOORI FIN and Airports
Assuming the 90 days trading horizon WOORI FIN GRP is expected to generate 0.65 times more return on investment than Airports. However, WOORI FIN GRP is 1.55 times less risky than Airports. It trades about 0.05 of its potential returns per unit of risk. Airports of Thailand is currently generating about -0.03 per unit of risk. If you would invest 2,940 in WOORI FIN GRP on November 9, 2024 and sell it today you would earn a total of 40.00 from holding WOORI FIN GRP or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WOORI FIN GRP vs. Airports of Thailand
Performance |
| Timeline |
| WOORI FIN GRP |
| Airports of Thailand |
WOORI FIN and Airports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WOORI FIN and Airports
The main advantage of trading using opposite WOORI FIN and Airports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WOORI FIN position performs unexpectedly, Airports 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 Airports will offset losses from the drop in Airports' long position.| WOORI FIN vs. JAPAN AIRLINES | WOORI FIN vs. American Airlines Group | WOORI FIN vs. Southwest Airlines Co | WOORI FIN vs. EAGLE MATERIALS |
| Airports vs. Japan Medical Dynamic | Airports vs. FIRST SHIP LEASE | Airports vs. ONWARD MEDICAL BV | Airports vs. Peijia Medical Limited |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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