Correlation Between Woori Financial and Sejong Industrial
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Sejong Industrial 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 Sejong Industrial 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 Sejong Industrial, you can compare the effects of market volatilities on Woori Financial and Sejong Industrial 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 Sejong Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Sejong Industrial.
Diversification Opportunities for Woori Financial and Sejong Industrial
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Sejong is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Sejong Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sejong Industrial 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 Sejong Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sejong Industrial has no effect on the direction of Woori Financial i.e., Woori Financial and Sejong Industrial go up and down completely randomly.
Pair Corralation between Woori Financial and Sejong Industrial
Assuming the 90 days trading horizon Woori Financial Group is expected to generate 0.68 times more return on investment than Sejong Industrial. However, Woori Financial Group is 1.48 times less risky than Sejong Industrial. It trades about -0.1 of its potential returns per unit of risk. Sejong Industrial is currently generating about -0.2 per unit of risk. If you would invest 1,610,000 in Woori Financial Group on September 12, 2024 and sell it today you would lose (66,000) from holding Woori Financial Group or give up 4.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Financial Group vs. Sejong Industrial
Performance |
| Timeline |
| Woori Financial Group |
| Sejong Industrial |
Woori Financial and Sejong Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Sejong Industrial
The main advantage of trading using opposite Woori Financial and Sejong Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Sejong Industrial 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 Sejong Industrial will offset losses from the drop in Sejong Industrial's long position.| Woori Financial vs. DB Insurance Co | Woori Financial vs. Pureun Mutual Savings | Woori Financial vs. Shinhan Financial Group | Woori Financial vs. iNtRON Biotechnology |
| Sejong Industrial vs. Daou Data Corp | Sejong Industrial vs. Solution Advanced Technology | Sejong Industrial vs. Busan Industrial Co | Sejong Industrial vs. Busan Ind |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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