Correlation Between Woori Financial and Ilyang Pharm
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Ilyang Pharm 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 Ilyang Pharm 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 Ilyang Pharm, you can compare the effects of market volatilities on Woori Financial and Ilyang Pharm 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 Ilyang Pharm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Ilyang Pharm.
Diversification Opportunities for Woori Financial and Ilyang Pharm
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Ilyang is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Ilyang Pharm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ilyang Pharm 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 Ilyang Pharm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ilyang Pharm has no effect on the direction of Woori Financial i.e., Woori Financial and Ilyang Pharm go up and down completely randomly.
Pair Corralation between Woori Financial and Ilyang Pharm
Assuming the 90 days trading horizon Woori Financial Group is expected to generate 1.1 times more return on investment than Ilyang Pharm. However, Woori Financial is 1.1 times more volatile than Ilyang Pharm. It trades about 0.08 of its potential returns per unit of risk. Ilyang Pharm is currently generating about -0.09 per unit of risk. If you would invest 1,042,634 in Woori Financial Group on September 12, 2024 and sell it today you would earn a total of 501,366 from holding Woori Financial Group or generate 48.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Financial Group vs. Ilyang Pharm
Performance |
| Timeline |
| Woori Financial Group |
| Ilyang Pharm |
Woori Financial and Ilyang Pharm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Ilyang Pharm
The main advantage of trading using opposite Woori Financial and Ilyang Pharm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Ilyang Pharm 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 Ilyang Pharm will offset losses from the drop in Ilyang Pharm's long position.| Woori Financial vs. DB Insurance Co | Woori Financial vs. Pureun Mutual Savings | Woori Financial vs. Shinhan Financial Group | Woori Financial vs. iNtRON Biotechnology |
| Ilyang Pharm vs. Digital Imaging Technology | Ilyang Pharm vs. Korea Information Engineering | Ilyang Pharm vs. Insung Information Co | Ilyang Pharm vs. Eugene Technology CoLtd |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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