Correlation Between Woori Financial and Youngbo Chemical
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Youngbo Chemical 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 Youngbo Chemical 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 Youngbo Chemical Co, you can compare the effects of market volatilities on Woori Financial and Youngbo Chemical 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 Youngbo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Youngbo Chemical.
Diversification Opportunities for Woori Financial and Youngbo Chemical
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Woori and Youngbo is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Youngbo Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngbo Chemical 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 Youngbo Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youngbo Chemical has no effect on the direction of Woori Financial i.e., Woori Financial and Youngbo Chemical go up and down completely randomly.
Pair Corralation between Woori Financial and Youngbo Chemical
Assuming the 90 days trading horizon Woori Financial is expected to generate 4.1 times less return on investment than Youngbo Chemical. But when comparing it to its historical volatility, Woori Financial Group is 2.9 times less risky than Youngbo Chemical. It trades about 0.26 of its potential returns per unit of risk. Youngbo Chemical Co is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 356,000 in Youngbo Chemical Co on October 29, 2024 and sell it today you would earn a total of 37,000 from holding Youngbo Chemical Co or generate 10.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Financial Group vs. Youngbo Chemical Co
Performance |
| Timeline |
| Woori Financial Group |
| Youngbo Chemical |
Woori Financial and Youngbo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Youngbo Chemical
The main advantage of trading using opposite Woori Financial and Youngbo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Youngbo Chemical 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 Youngbo Chemical will offset losses from the drop in Youngbo Chemical's long position.| Woori Financial vs. Green Cross Medical | Woori Financial vs. Seoul Food Industrial | Woori Financial vs. Sam Yang Foods | Woori Financial vs. Chorokbaem Healthcare Co |
| Youngbo Chemical vs. Hankukpackage Co | Youngbo Chemical vs. Woori Financial Group | Youngbo Chemical vs. Settlebank | Youngbo Chemical 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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