Correlation Between Woori Financial and GS Engineering
Can any of the company-specific risk be diversified away by investing in both Woori Financial and GS Engineering 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 GS Engineering 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 GS Engineering Construction, you can compare the effects of market volatilities on Woori Financial and GS Engineering 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 GS Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and GS Engineering.
Diversification Opportunities for Woori Financial and GS Engineering
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Woori and 006360 is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and GS Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Engineering Const 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 GS Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Engineering Const has no effect on the direction of Woori Financial i.e., Woori Financial and GS Engineering go up and down completely randomly.
Pair Corralation between Woori Financial and GS Engineering
Assuming the 90 days trading horizon Woori Financial Group is expected to generate 0.31 times more return on investment than GS Engineering. However, Woori Financial Group is 3.18 times less risky than GS Engineering. It trades about 0.03 of its potential returns per unit of risk. GS Engineering Construction is currently generating about -0.08 per unit of risk. If you would invest 1,574,000 in Woori Financial Group on October 25, 2024 and sell it today you would earn a total of 6,000 from holding Woori Financial Group or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Financial Group vs. GS Engineering Construction
Performance |
| Timeline |
| Woori Financial Group |
| GS Engineering Const |
Woori Financial and GS Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and GS Engineering
The main advantage of trading using opposite Woori Financial and GS Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, GS Engineering 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 GS Engineering will offset losses from the drop in GS Engineering's long position.| Woori Financial vs. Shinhan Financial Group | Woori Financial vs. Hana Financial | Woori Financial vs. KakaoBank Corp | Woori Financial vs. Industrial Bank |
| GS Engineering vs. KB Financial Group | GS Engineering vs. Shinhan Financial Group | GS Engineering vs. Hana Financial | GS Engineering 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |