Correlation Between Woori Financial and Insun Environment
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Insun Environment 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 Insun Environment 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 Insun Environment New, you can compare the effects of market volatilities on Woori Financial and Insun Environment 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 Insun Environment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Insun Environment.
Diversification Opportunities for Woori Financial and Insun Environment
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Insun is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Insun Environment New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insun Environment New 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 Insun Environment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insun Environment New has no effect on the direction of Woori Financial i.e., Woori Financial and Insun Environment go up and down completely randomly.
Pair Corralation between Woori Financial and Insun Environment
Assuming the 90 days trading horizon Woori Financial Group is expected to generate 0.39 times more return on investment than Insun Environment. However, Woori Financial Group is 2.58 times less risky than Insun Environment. It trades about 0.44 of its potential returns per unit of risk. Insun Environment New is currently generating about 0.1 per unit of risk. If you would invest 1,526,000 in Woori Financial Group on November 4, 2024 and sell it today you would earn a total of 84,000 from holding Woori Financial Group or generate 5.5% 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. Insun Environment New
Performance |
| Timeline |
| Woori Financial Group |
| Insun Environment New |
Woori Financial and Insun Environment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Insun Environment
The main advantage of trading using opposite Woori Financial and Insun Environment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Insun Environment 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 Insun Environment will offset losses from the drop in Insun Environment's long position.| Woori Financial vs. ENF Technology Co | Woori Financial vs. FoodNamoo | Woori Financial vs. Sempio Foods Co | Woori Financial vs. Bosung Power Technology |
| Insun Environment vs. Samyoung Electronics Co | Insun Environment vs. Aprogen Healthcare Games | Insun Environment vs. Daol Investment Securities | Insun Environment vs. Nh Investment And |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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