Correlation Between Woori Financial and Kiwoom
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Kiwoom 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 Kiwoom 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 Kiwoom, you can compare the effects of market volatilities on Woori Financial and Kiwoom 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 Kiwoom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Kiwoom.
Diversification Opportunities for Woori Financial and Kiwoom
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Woori and Kiwoom is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Kiwoom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kiwoom 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 Kiwoom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kiwoom has no effect on the direction of Woori Financial i.e., Woori Financial and Kiwoom go up and down completely randomly.
Pair Corralation between Woori Financial and Kiwoom
Assuming the 90 days trading horizon Woori Financial is expected to generate 1.08 times less return on investment than Kiwoom. But when comparing it to its historical volatility, Woori Financial Group is 1.62 times less risky than Kiwoom. It trades about 0.06 of its potential returns per unit of risk. Kiwoom is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 8,663,167 in Kiwoom on September 14, 2024 and sell it today you would earn a total of 3,386,833 from holding Kiwoom or generate 39.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Woori Financial Group vs. Kiwoom
Performance |
| Timeline |
| Woori Financial Group |
| Kiwoom |
Woori Financial and Kiwoom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Kiwoom
The main advantage of trading using opposite Woori Financial and Kiwoom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Kiwoom 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 Kiwoom will offset losses from the drop in Kiwoom's long position.| Woori Financial vs. Shinhan Financial Group | Woori Financial vs. Hana Financial | Woori Financial vs. KakaoBank Corp | Woori Financial vs. Industrial Bank |
| Kiwoom vs. KB Financial Group | Kiwoom vs. Shinhan Financial Group | Kiwoom vs. Hana Financial | Kiwoom vs. Woori Financial Group |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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