Correlation Between Woori Financial and Imarketkorea
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Imarketkorea 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 Imarketkorea 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 Imarketkorea, you can compare the effects of market volatilities on Woori Financial and Imarketkorea 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 Imarketkorea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Imarketkorea.
Diversification Opportunities for Woori Financial and Imarketkorea
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Imarketkorea is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Imarketkorea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imarketkorea 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 Imarketkorea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imarketkorea has no effect on the direction of Woori Financial i.e., Woori Financial and Imarketkorea go up and down completely randomly.
Pair Corralation between Woori Financial and Imarketkorea
Assuming the 90 days trading horizon Woori Financial Group is expected to generate 3.15 times more return on investment than Imarketkorea. However, Woori Financial is 3.15 times more volatile than Imarketkorea. It trades about 0.05 of its potential returns per unit of risk. Imarketkorea is currently generating about -0.05 per unit of risk. If you would invest 1,610,788 in Woori Financial Group on September 2, 2024 and sell it today you would earn a total of 60,212 from holding Woori Financial Group or generate 3.74% 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. Imarketkorea
Performance |
| Timeline |
| Woori Financial Group |
| Imarketkorea |
Woori Financial and Imarketkorea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Imarketkorea
The main advantage of trading using opposite Woori Financial and Imarketkorea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Imarketkorea 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 Imarketkorea will offset losses from the drop in Imarketkorea'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 |
| Imarketkorea vs. Daishin Information Communications | Imarketkorea vs. RF Materials Co | Imarketkorea vs. Phoenix Materials Co | Imarketkorea vs. Lotte Chilsung Beverage |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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