Correlation Between Woori Financial and Automobile
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Automobile 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 Automobile 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 Automobile Pc, you can compare the effects of market volatilities on Woori Financial and Automobile 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 Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Automobile.
Diversification Opportunities for Woori Financial and Automobile
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Woori and Automobile is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Automobile Pc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automobile Pc 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 Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automobile Pc has no effect on the direction of Woori Financial i.e., Woori Financial and Automobile go up and down completely randomly.
Pair Corralation between Woori Financial and Automobile
Assuming the 90 days trading horizon Woori Financial Group is expected to generate 0.27 times more return on investment than Automobile. However, Woori Financial Group is 3.71 times less risky than Automobile. It trades about 0.2 of its potential returns per unit of risk. Automobile Pc is currently generating about 0.01 per unit of risk. If you would invest 1,606,000 in Woori Financial Group on August 27, 2024 and sell it today you would earn a total of 79,000 from holding Woori Financial Group or generate 4.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Financial Group vs. Automobile Pc
Performance |
| Timeline |
| Woori Financial Group |
| Automobile Pc |
Woori Financial and Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Automobile
The main advantage of trading using opposite Woori Financial and Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Automobile 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 Automobile will offset losses from the drop in Automobile's long position.| Woori Financial vs. Automobile Pc | Woori Financial vs. Daishin Information Communications | Woori Financial vs. Pureun Mutual Savings | Woori Financial vs. Alton Sports CoLtd |
| Automobile vs. Busan Industrial Co | Automobile vs. Busan Ind | Automobile vs. Mirae Asset Daewoo | Automobile vs. UNISEM Co |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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