Correlation Between Woori Financial and Eagle Veterinary
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Eagle Veterinary 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 Eagle Veterinary 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 Eagle Veterinary Technology, you can compare the effects of market volatilities on Woori Financial and Eagle Veterinary 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 Eagle Veterinary. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Eagle Veterinary.
Diversification Opportunities for Woori Financial and Eagle Veterinary
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Woori and Eagle is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Eagle Veterinary Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Veterinary Tec 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 Eagle Veterinary. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Veterinary Tec has no effect on the direction of Woori Financial i.e., Woori Financial and Eagle Veterinary go up and down completely randomly.
Pair Corralation between Woori Financial and Eagle Veterinary
Assuming the 90 days trading horizon Woori Financial Group is expected to under-perform the Eagle Veterinary. But the stock apears to be less risky and, when comparing its historical volatility, Woori Financial Group is 1.19 times less risky than Eagle Veterinary. The stock trades about -0.05 of its potential returns per unit of risk. The Eagle Veterinary Technology is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 510,695 in Eagle Veterinary Technology on October 17, 2024 and sell it today you would lose (26,195) from holding Eagle Veterinary Technology or give up 5.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Financial Group vs. Eagle Veterinary Technology
Performance |
| Timeline |
| Woori Financial Group |
| Eagle Veterinary Tec |
Woori Financial and Eagle Veterinary Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Eagle Veterinary
The main advantage of trading using opposite Woori Financial and Eagle Veterinary positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Eagle Veterinary 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 Eagle Veterinary will offset losses from the drop in Eagle Veterinary's long position.| Woori Financial vs. System and Application | Woori Financial vs. Lotte Data Communication | Woori Financial vs. ECSTELECOM Co | Woori Financial vs. Korean Drug Co |
| Eagle Veterinary vs. Woori Financial Group | Eagle Veterinary vs. DB Financial Investment | Eagle Veterinary vs. Duksan Hi Metal | Eagle Veterinary vs. KB 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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