Correlation Between Woori Financial and Daeduck Electronics
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Daeduck Electronics 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 Daeduck Electronics 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 Daeduck Electronics Co, you can compare the effects of market volatilities on Woori Financial and Daeduck Electronics 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 Daeduck Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Daeduck Electronics.
Diversification Opportunities for Woori Financial and Daeduck Electronics
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Daeduck is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Daeduck Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daeduck Electronics 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 Daeduck Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daeduck Electronics has no effect on the direction of Woori Financial i.e., Woori Financial and Daeduck Electronics go up and down completely randomly.
Pair Corralation between Woori Financial and Daeduck Electronics
Assuming the 90 days trading horizon Woori Financial Group is expected to generate 2.04 times more return on investment than Daeduck Electronics. However, Woori Financial is 2.04 times more volatile than Daeduck Electronics Co. It trades about 0.38 of its potential returns per unit of risk. Daeduck Electronics Co is currently generating about -0.08 per unit of risk. If you would invest 1,543,000 in Woori Financial Group on November 5, 2024 and sell it today you would earn a total of 67,000 from holding Woori Financial Group or generate 4.34% 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. Daeduck Electronics Co
Performance |
| Timeline |
| Woori Financial Group |
| Daeduck Electronics |
Woori Financial and Daeduck Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Daeduck Electronics
The main advantage of trading using opposite Woori Financial and Daeduck Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Daeduck Electronics 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 Daeduck Electronics will offset losses from the drop in Daeduck Electronics' long position.| Woori Financial vs. ENF Technology Co | Woori Financial vs. FoodNamoo | Woori Financial vs. Sempio Foods Co | Woori Financial vs. Bosung Power Technology |
| Daeduck Electronics vs. Daehan Steel | Daeduck Electronics vs. Industrial Bank | Daeduck Electronics vs. Shinhan Financial Group | Daeduck Electronics vs. KB 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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