Correlation Between Woori Financial and Innowireless
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Innowireless 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 Innowireless 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 Innowireless Co, you can compare the effects of market volatilities on Woori Financial and Innowireless 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 Innowireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Innowireless.
Diversification Opportunities for Woori Financial and Innowireless
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Woori and Innowireless is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Innowireless Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innowireless 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 Innowireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innowireless has no effect on the direction of Woori Financial i.e., Woori Financial and Innowireless go up and down completely randomly.
Pair Corralation between Woori Financial and Innowireless
Assuming the 90 days trading horizon Woori Financial is expected to generate 1.77 times less return on investment than Innowireless. But when comparing it to its historical volatility, Woori Financial Group is 2.88 times less risky than Innowireless. It trades about 0.38 of its potential returns per unit of risk. Innowireless Co is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2,120,000 in Innowireless Co on November 5, 2024 and sell it today you would earn a total of 160,000 from holding Innowireless Co or generate 7.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Financial Group vs. Innowireless Co
Performance |
| Timeline |
| Woori Financial Group |
| Innowireless |
Woori Financial and Innowireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Innowireless
The main advantage of trading using opposite Woori Financial and Innowireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Innowireless 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 Innowireless will offset losses from the drop in Innowireless' long position.| Woori Financial vs. Hanil Chemical Ind | Woori Financial vs. Daiyang Metal Co | Woori Financial vs. Seoyon Topmetal Co | Woori Financial vs. Namhae Chemical |
| Innowireless vs. Daelim Trading Co | Innowireless vs. LG Chemicals | Innowireless vs. SK Chemicals Co | Innowireless vs. Golden Bridge Investment |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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