Correlation Between Woori Financial and MetaLabs
Can any of the company-specific risk be diversified away by investing in both Woori Financial and MetaLabs 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 MetaLabs 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 MetaLabs Co, you can compare the effects of market volatilities on Woori Financial and MetaLabs 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 MetaLabs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and MetaLabs.
Diversification Opportunities for Woori Financial and MetaLabs
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Woori and MetaLabs is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and MetaLabs Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetaLabs 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 MetaLabs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetaLabs has no effect on the direction of Woori Financial i.e., Woori Financial and MetaLabs go up and down completely randomly.
Pair Corralation between Woori Financial and MetaLabs
Assuming the 90 days trading horizon Woori Financial Group is expected to under-perform the MetaLabs. But the stock apears to be less risky and, when comparing its historical volatility, Woori Financial Group is 2.49 times less risky than MetaLabs. The stock trades about -0.05 of its potential returns per unit of risk. The MetaLabs Co is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 132,000 in MetaLabs Co on October 23, 2024 and sell it today you would earn a total of 4,300 from holding MetaLabs Co or generate 3.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Financial Group vs. MetaLabs Co
Performance |
| Timeline |
| Woori Financial Group |
| MetaLabs |
Woori Financial and MetaLabs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and MetaLabs
The main advantage of trading using opposite Woori Financial and MetaLabs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, MetaLabs 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 MetaLabs will offset losses from the drop in MetaLabs' long position.| Woori Financial vs. Daejung Chemicals Metals | Woori Financial vs. Namhwa Industrial Co | Woori Financial vs. Cloud Air CoLtd | Woori Financial vs. Seoul Semiconductor Co |
| MetaLabs vs. KB Financial Group | MetaLabs vs. Shinhan Financial Group | MetaLabs vs. Hana Financial | MetaLabs 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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