Correlation Between Woori Financial and Koryo Credit
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Koryo Credit 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 Koryo Credit 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 Koryo Credit Information, you can compare the effects of market volatilities on Woori Financial and Koryo Credit 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 Koryo Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Koryo Credit.
Diversification Opportunities for Woori Financial and Koryo Credit
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Woori and Koryo is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Koryo Credit Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koryo Credit Information 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 Koryo Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koryo Credit Information has no effect on the direction of Woori Financial i.e., Woori Financial and Koryo Credit go up and down completely randomly.
Pair Corralation between Woori Financial and Koryo Credit
Assuming the 90 days trading horizon Woori Financial Group is expected to generate 2.08 times more return on investment than Koryo Credit. However, Woori Financial is 2.08 times more volatile than Koryo Credit Information. It trades about 0.09 of its potential returns per unit of risk. Koryo Credit Information is currently generating about -0.03 per unit of risk. If you would invest 1,373,963 in Woori Financial Group on September 2, 2024 and sell it today you would earn a total of 297,037 from holding Woori Financial Group or generate 21.62% 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. Koryo Credit Information
Performance |
| Timeline |
| Woori Financial Group |
| Koryo Credit Information |
Woori Financial and Koryo Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Koryo Credit
The main advantage of trading using opposite Woori Financial and Koryo Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Koryo Credit 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 Koryo Credit will offset losses from the drop in Koryo Credit's long position.| Woori Financial vs. PJ Metal Co | Woori Financial vs. Samyung Trading Co | Woori Financial vs. NH Investment Securities | Woori Financial vs. LB Investment |
| Koryo Credit vs. Lotte Energy Materials | Koryo Credit vs. Lotte Data Communication | Koryo Credit vs. Nable Communications | Koryo Credit vs. Hana Materials |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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