Correlation Between Woori Financial and Hanwha InvestmentSecuri
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Hanwha InvestmentSecuri 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 Hanwha InvestmentSecuri 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 Hanwha InvestmentSecurities Co, you can compare the effects of market volatilities on Woori Financial and Hanwha InvestmentSecuri 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 Hanwha InvestmentSecuri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Hanwha InvestmentSecuri.
Diversification Opportunities for Woori Financial and Hanwha InvestmentSecuri
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Woori and Hanwha is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Hanwha InvestmentSecurities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha InvestmentSecuri 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 Hanwha InvestmentSecuri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha InvestmentSecuri has no effect on the direction of Woori Financial i.e., Woori Financial and Hanwha InvestmentSecuri go up and down completely randomly.
Pair Corralation between Woori Financial and Hanwha InvestmentSecuri
Assuming the 90 days trading horizon Woori Financial is expected to generate 1.51 times less return on investment than Hanwha InvestmentSecuri. But when comparing it to its historical volatility, Woori Financial Group is 1.94 times less risky than Hanwha InvestmentSecuri. It trades about 0.07 of its potential returns per unit of risk. Hanwha InvestmentSecurities Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 326,500 in Hanwha InvestmentSecurities Co on September 14, 2024 and sell it today you would earn a total of 62,000 from holding Hanwha InvestmentSecurities Co or generate 18.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Financial Group vs. Hanwha InvestmentSecurities Co
Performance |
| Timeline |
| Woori Financial Group |
| Hanwha InvestmentSecuri |
Woori Financial and Hanwha InvestmentSecuri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Hanwha InvestmentSecuri
The main advantage of trading using opposite Woori Financial and Hanwha InvestmentSecuri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Hanwha InvestmentSecuri 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 Hanwha InvestmentSecuri will offset losses from the drop in Hanwha InvestmentSecuri's long position.| Woori Financial vs. Cheryong Industrial CoLtd | Woori Financial vs. Kbi Metal Co | Woori Financial vs. Songwon Industrial Co | Woori Financial vs. LEENO Industrial |
| Hanwha InvestmentSecuri vs. KB Financial Group | Hanwha InvestmentSecuri vs. Shinhan Financial Group | Hanwha InvestmentSecuri vs. Hana Financial | Hanwha InvestmentSecuri vs. Woori Financial Group |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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