Correlation Between Woori Financial and Hankook Furniture
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Hankook Furniture 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 Hankook Furniture 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 Hankook Furniture Co, you can compare the effects of market volatilities on Woori Financial and Hankook Furniture 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 Hankook Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Hankook Furniture.
Diversification Opportunities for Woori Financial and Hankook Furniture
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Hankook is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Hankook Furniture Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hankook Furniture 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 Hankook Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hankook Furniture has no effect on the direction of Woori Financial i.e., Woori Financial and Hankook Furniture go up and down completely randomly.
Pair Corralation between Woori Financial and Hankook Furniture
Assuming the 90 days trading horizon Woori Financial Group is expected to under-perform the Hankook Furniture. But the stock apears to be less risky and, when comparing its historical volatility, Woori Financial Group is 1.01 times less risky than Hankook Furniture. The stock trades about -0.05 of its potential returns per unit of risk. The Hankook Furniture Co is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 390,137 in Hankook Furniture Co on October 23, 2024 and sell it today you would earn a total of 10,863 from holding Hankook Furniture Co or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Financial Group vs. Hankook Furniture Co
Performance |
| Timeline |
| Woori Financial Group |
| Hankook Furniture |
Woori Financial and Hankook Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Hankook Furniture
The main advantage of trading using opposite Woori Financial and Hankook Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Hankook Furniture 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 Hankook Furniture will offset losses from the drop in Hankook Furniture's long position.| Woori Financial vs. Daejung Chemicals Metals | Woori Financial vs. Namhwa Industrial Co | Woori Financial vs. Cloud Air CoLtd | Woori Financial vs. Seoul Semiconductor Co |
| Hankook Furniture vs. KB Financial Group | Hankook Furniture vs. Shinhan Financial Group | Hankook Furniture vs. Hana Financial | Hankook Furniture 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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