Correlation Between Woori Financial and Hansol Chemica
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Hansol Chemica 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 Hansol Chemica 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 Hansol Chemica, you can compare the effects of market volatilities on Woori Financial and Hansol Chemica 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 Hansol Chemica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Hansol Chemica.
Diversification Opportunities for Woori Financial and Hansol Chemica
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Hansol is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Hansol Chemica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansol Chemica 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 Hansol Chemica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansol Chemica has no effect on the direction of Woori Financial i.e., Woori Financial and Hansol Chemica go up and down completely randomly.
Pair Corralation between Woori Financial and Hansol Chemica
Assuming the 90 days trading horizon Woori Financial Group is expected to generate 0.37 times more return on investment than Hansol Chemica. However, Woori Financial Group is 2.7 times less risky than Hansol Chemica. It trades about 0.39 of its potential returns per unit of risk. Hansol Chemica is currently generating about -0.39 per unit of risk. If you would invest 1,543,000 in Woori Financial Group on September 1, 2024 and sell it today you would earn a total of 128,000 from holding Woori Financial Group or generate 8.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Woori Financial Group vs. Hansol Chemica
Performance |
| Timeline |
| Woori Financial Group |
| Hansol Chemica |
Woori Financial and Hansol Chemica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Hansol Chemica
The main advantage of trading using opposite Woori Financial and Hansol Chemica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Hansol Chemica 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 Hansol Chemica will offset losses from the drop in Hansol Chemica's long position.| Woori Financial vs. Infinitt Healthcare Co | Woori Financial vs. Chorokbaem Healthcare Co | Woori Financial vs. FoodNamoo | Woori Financial vs. ABOV Semiconductor Co |
| Hansol Chemica vs. Display Tech Co | Hansol Chemica vs. LG Display Co | Hansol Chemica vs. Inzi Display CoLtd | Hansol Chemica vs. Eagle Veterinary Technology |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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