Correlation Between Woori Financial and EO Technics
Can any of the company-specific risk be diversified away by investing in both Woori Financial and EO Technics 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 EO Technics 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 EO Technics Co, you can compare the effects of market volatilities on Woori Financial and EO Technics 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 EO Technics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and EO Technics.
Diversification Opportunities for Woori Financial and EO Technics
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and 039030 is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and EO Technics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EO Technics 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 EO Technics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EO Technics has no effect on the direction of Woori Financial i.e., Woori Financial and EO Technics go up and down completely randomly.
Pair Corralation between Woori Financial and EO Technics
Assuming the 90 days trading horizon Woori Financial Group is expected to generate 0.6 times more return on investment than EO Technics. However, Woori Financial Group is 1.66 times less risky than EO Technics. It trades about 0.16 of its potential returns per unit of risk. EO Technics Co is currently generating about -0.19 per unit of risk. If you would invest 1,503,233 in Woori Financial Group on December 8, 2024 and sell it today you would earn a total of 93,767 from holding Woori Financial Group or generate 6.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Financial Group vs. EO Technics Co
Performance |
| Timeline |
| Woori Financial Group |
| EO Technics |
Woori Financial and EO Technics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and EO Technics
The main advantage of trading using opposite Woori Financial and EO Technics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, EO Technics 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 EO Technics will offset losses from the drop in EO Technics' long position.| Woori Financial vs. Jb Financial | ||
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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