Correlation Between Woori Financial and Hanil Iron
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Hanil Iron 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 Financial and Hanil Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woori Financial Group and Hanil Iron Steel, you can compare the effects of market volatilities on Woori Financial and Hanil Iron 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 Financial with a short position of Hanil Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Hanil Iron.
Diversification Opportunities for Woori Financial and Hanil Iron
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Woori and Hanil is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Hanil Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanil Iron Steel and Woori Financial 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 Financial Group are associated (or correlated) with Hanil Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanil Iron Steel has no effect on the direction of Woori Financial i.e., Woori Financial and Hanil Iron go up and down completely randomly.
Pair Corralation between Woori Financial and Hanil Iron
Assuming the 90 days trading horizon Woori Financial Group is expected to generate 0.53 times more return on investment than Hanil Iron. However, Woori Financial Group is 1.89 times less risky than Hanil Iron. It trades about 0.38 of its potential returns per unit of risk. Hanil Iron Steel is currently generating about -0.42 per unit of risk. If you would invest 1,543,000 in Woori Financial Group on November 6, 2024 and sell it today you would earn a total of 67,000 from holding Woori Financial Group or generate 4.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Financial Group vs. Hanil Iron Steel
Performance |
| Timeline |
| Woori Financial Group |
| Hanil Iron Steel |
Woori Financial and Hanil Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Hanil Iron
The main advantage of trading using opposite Woori Financial and Hanil Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Hanil Iron 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 Hanil Iron will offset losses from the drop in Hanil Iron's long position.| Woori Financial vs. Shinsegae Food | Woori Financial vs. Foodnamoo | Woori Financial vs. Nice Information Telecommunication | Woori Financial vs. Asiana Airlines |
| Hanil Iron vs. AptaBio Therapeutics | Hanil Iron vs. Daewoo SBI SPAC | Hanil Iron vs. Dream Security co | Hanil Iron vs. Microfriend |
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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