Correlation Between Woori Financial and Ni Steel
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Ni Steel 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 Ni Steel 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 Ni Steel, you can compare the effects of market volatilities on Woori Financial and Ni Steel 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 Ni Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Ni Steel.
Diversification Opportunities for Woori Financial and Ni Steel
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and 008260 is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Ni Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ni Steel 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 Ni Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ni Steel has no effect on the direction of Woori Financial i.e., Woori Financial and Ni Steel go up and down completely randomly.
Pair Corralation between Woori Financial and Ni Steel
Assuming the 90 days trading horizon Woori Financial Group is expected to generate 0.97 times more return on investment than Ni Steel. However, Woori Financial Group is 1.03 times less risky than Ni Steel. It trades about 0.09 of its potential returns per unit of risk. Ni Steel is currently generating about -0.1 per unit of risk. If you would invest 1,182,583 in Woori Financial Group on September 3, 2024 and sell it today you would earn a total of 488,417 from holding Woori Financial Group or generate 41.3% 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. Ni Steel
Performance |
| Timeline |
| Woori Financial Group |
| Ni Steel |
Woori Financial and Ni Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Ni Steel
The main advantage of trading using opposite Woori Financial and Ni Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Ni Steel 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 Ni Steel will offset losses from the drop in Ni Steel's long position.| Woori Financial vs. Finebesteel | Woori Financial vs. Shin Steel Co | Woori Financial vs. Fine Besteel Co | Woori Financial vs. Hanil Iron Steel |
| Ni Steel vs. Jin Air Co | Ni Steel vs. Automobile Pc | Ni Steel vs. Taegu Broadcasting | Ni Steel vs. AurosTechnology |
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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