Correlation Between Woori Financial and Seoul Broadcasting
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Seoul Broadcasting 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 Seoul Broadcasting 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 Seoul Broadcasting System, you can compare the effects of market volatilities on Woori Financial and Seoul Broadcasting 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 Seoul Broadcasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Seoul Broadcasting.
Diversification Opportunities for Woori Financial and Seoul Broadcasting
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Woori and Seoul is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Seoul Broadcasting System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoul Broadcasting System 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 Seoul Broadcasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoul Broadcasting System has no effect on the direction of Woori Financial i.e., Woori Financial and Seoul Broadcasting go up and down completely randomly.
Pair Corralation between Woori Financial and Seoul Broadcasting
Assuming the 90 days trading horizon Woori Financial Group is expected to under-perform the Seoul Broadcasting. But the stock apears to be less risky and, when comparing its historical volatility, Woori Financial Group is 13.48 times less risky than Seoul Broadcasting. The stock trades about -0.04 of its potential returns per unit of risk. The Seoul Broadcasting System is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 2,000,000 in Seoul Broadcasting System on October 21, 2024 and sell it today you would earn a total of 440,000 from holding Seoul Broadcasting System or generate 22.0% 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. Seoul Broadcasting System
Performance |
| Timeline |
| Woori Financial Group |
| Seoul Broadcasting System |
Woori Financial and Seoul Broadcasting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Seoul Broadcasting
The main advantage of trading using opposite Woori Financial and Seoul Broadcasting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Seoul Broadcasting 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 Seoul Broadcasting will offset losses from the drop in Seoul Broadcasting's long position.| Woori Financial vs. PNC Technologies co | Woori Financial vs. PH Tech Co | Woori Financial vs. Barunson Entertainment Arts | Woori Financial vs. Alton Sports CoLtd |
| Seoul Broadcasting vs. BooKook Steel Co | Seoul Broadcasting vs. SH Energy Chemical | Seoul Broadcasting vs. Genie Music | Seoul Broadcasting vs. Hyundai BNG Steel |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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