Correlation Between Woori Financial and PJ Metal
Can any of the company-specific risk be diversified away by investing in both Woori Financial and PJ Metal 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 PJ Metal 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 PJ Metal Co, you can compare the effects of market volatilities on Woori Financial and PJ Metal 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 PJ Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and PJ Metal.
Diversification Opportunities for Woori Financial and PJ Metal
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Woori and 128660 is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and PJ Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PJ Metal 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 PJ Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PJ Metal has no effect on the direction of Woori Financial i.e., Woori Financial and PJ Metal go up and down completely randomly.
Pair Corralation between Woori Financial and PJ Metal
Assuming the 90 days trading horizon Woori Financial Group is expected to generate 0.56 times more return on investment than PJ Metal. However, Woori Financial Group is 1.77 times less risky than PJ Metal. It trades about 0.09 of its potential returns per unit of risk. PJ Metal Co is currently generating about -0.01 per unit of risk. If you would invest 1,182,583 in Woori Financial Group on September 3, 2024 and sell it today you would earn a total of 512,417 from holding Woori Financial Group or generate 43.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Financial Group vs. PJ Metal Co
Performance |
| Timeline |
| Woori Financial Group |
| PJ Metal |
Woori Financial and PJ Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and PJ Metal
The main advantage of trading using opposite Woori Financial and PJ Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, PJ Metal 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 PJ Metal will offset losses from the drop in PJ Metal's long position.| Woori Financial vs. Finebesteel | Woori Financial vs. Shin Steel Co | Woori Financial vs. Fine Besteel Co | Woori Financial vs. Hanil Iron Steel |
| PJ Metal vs. Keum Kang Steel | PJ Metal vs. Tplex Co | PJ Metal vs. Gyeongnam Steel Co | PJ Metal vs. Daedong Steel Co |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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