Correlation Between Woori Financial and Bosung Power
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Bosung Power 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 Bosung Power 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 Bosung Power Technology, you can compare the effects of market volatilities on Woori Financial and Bosung Power 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 Bosung Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Bosung Power.
Diversification Opportunities for Woori Financial and Bosung Power
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Woori and Bosung is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Bosung Power Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bosung Power Technology 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 Bosung Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bosung Power Technology has no effect on the direction of Woori Financial i.e., Woori Financial and Bosung Power go up and down completely randomly.
Pair Corralation between Woori Financial and Bosung Power
Assuming the 90 days trading horizon Woori Financial Group is expected to generate 0.51 times more return on investment than Bosung Power. However, Woori Financial Group is 1.97 times less risky than Bosung Power. It trades about 0.07 of its potential returns per unit of risk. Bosung Power Technology is currently generating about 0.0 per unit of risk. If you would invest 1,198,277 in Woori Financial Group on October 16, 2024 and sell it today you would earn a total of 357,723 from holding Woori Financial Group or generate 29.85% 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. Bosung Power Technology
Performance |
Timeline |
Woori Financial Group |
Bosung Power Technology |
Woori Financial and Bosung Power Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Woori Financial and Bosung Power
The main advantage of trading using opposite Woori Financial and Bosung Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Bosung Power 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 Bosung Power will offset losses from the drop in Bosung Power's long position.Woori Financial vs. Ecoplastic | Woori Financial vs. TOPMATERIAL LTD | Woori Financial vs. SAMG Entertainment Co | Woori Financial vs. MEDIANA CoLtd |
Bosung Power vs. SEOJEON ELECTRIC MACHINERY | Bosung Power vs. Digital Imaging Technology | Bosung Power vs. Tway Air Co | Bosung Power vs. Handok Clean Tech |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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