Correlation Between Woori Financial and Hankuk Steel
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Hankuk 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 Hankuk 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 Hankuk Steel Wire, you can compare the effects of market volatilities on Woori Financial and Hankuk 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 Hankuk Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Hankuk Steel.
Diversification Opportunities for Woori Financial and Hankuk Steel
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Woori and Hankuk is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Hankuk Steel Wire in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hankuk Steel Wire 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 Hankuk Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hankuk Steel Wire has no effect on the direction of Woori Financial i.e., Woori Financial and Hankuk Steel go up and down completely randomly.
Pair Corralation between Woori Financial and Hankuk Steel
Assuming the 90 days trading horizon Woori Financial Group is expected to under-perform the Hankuk Steel. But the stock apears to be less risky and, when comparing its historical volatility, Woori Financial Group is 2.87 times less risky than Hankuk Steel. The stock trades about -0.05 of its potential returns per unit of risk. The Hankuk Steel Wire is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 279,000 in Hankuk Steel Wire on October 24, 2024 and sell it today you would earn a total of 181,000 from holding Hankuk Steel Wire or generate 64.87% 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. Hankuk Steel Wire
Performance |
| Timeline |
| Woori Financial Group |
| Hankuk Steel Wire |
Woori Financial and Hankuk Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Hankuk Steel
The main advantage of trading using opposite Woori Financial and Hankuk Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Hankuk 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 Hankuk Steel will offset losses from the drop in Hankuk Steel's long position.| Woori Financial vs. Hankook Furniture Co | Woori Financial vs. Shinsegae Food | Woori Financial vs. Dongbang Transport Logistics | Woori Financial vs. Organic Special Pet |
| Hankuk Steel vs. LG Chemicals | Hankuk Steel vs. POSCO Holdings | Hankuk Steel vs. Hanwha Solutions | Hankuk Steel vs. Lotte Chemical Corp |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Global Correlations Find global opportunities by holding instruments from different markets |