Correlation Between Woori Financial and Dongbang Ship
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Dongbang Ship 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 Dongbang Ship 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 Dongbang Ship Machinery, you can compare the effects of market volatilities on Woori Financial and Dongbang Ship 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 Dongbang Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Dongbang Ship.
Diversification Opportunities for Woori Financial and Dongbang Ship
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Dongbang is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Dongbang Ship Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbang Ship Machinery 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 Dongbang Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongbang Ship Machinery has no effect on the direction of Woori Financial i.e., Woori Financial and Dongbang Ship go up and down completely randomly.
Pair Corralation between Woori Financial and Dongbang Ship
Assuming the 90 days trading horizon Woori Financial Group is expected to generate 0.28 times more return on investment than Dongbang Ship. However, Woori Financial Group is 3.62 times less risky than Dongbang Ship. It trades about 0.38 of its potential returns per unit of risk. Dongbang Ship Machinery is currently generating about 0.08 per unit of risk. If you would invest 1,543,000 in Woori Financial Group on November 5, 2024 and sell it today you would earn a total of 67,000 from holding Woori Financial Group or generate 4.34% 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. Dongbang Ship Machinery
Performance |
| Timeline |
| Woori Financial Group |
| Dongbang Ship Machinery |
Woori Financial and Dongbang Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Dongbang Ship
The main advantage of trading using opposite Woori Financial and Dongbang Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Dongbang Ship 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 Dongbang Ship will offset losses from the drop in Dongbang Ship's 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 |
| Dongbang Ship vs. Lotte Data Communication | Dongbang Ship vs. Pan Entertainment Co | Dongbang Ship vs. Daishin Information Communications | Dongbang Ship vs. JYP Entertainment Corp |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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