Correlation Between Woori Financial and Digital Multimedia
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Digital Multimedia 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 Digital Multimedia 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 Digital Multimedia Technology, you can compare the effects of market volatilities on Woori Financial and Digital Multimedia 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 Digital Multimedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Digital Multimedia.
Diversification Opportunities for Woori Financial and Digital Multimedia
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Digital is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Digital Multimedia Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Multimedia 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 Digital Multimedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Multimedia has no effect on the direction of Woori Financial i.e., Woori Financial and Digital Multimedia go up and down completely randomly.
Pair Corralation between Woori Financial and Digital Multimedia
Assuming the 90 days trading horizon Woori Financial Group is expected to under-perform the Digital Multimedia. But the stock apears to be less risky and, when comparing its historical volatility, Woori Financial Group is 3.11 times less risky than Digital Multimedia. The stock trades about -0.09 of its potential returns per unit of risk. The Digital Multimedia Technology is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 166,600 in Digital Multimedia Technology on October 28, 2024 and sell it today you would earn a total of 27,700 from holding Digital Multimedia Technology or generate 16.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Financial Group vs. Digital Multimedia Technology
Performance |
| Timeline |
| Woori Financial Group |
| Digital Multimedia |
Woori Financial and Digital Multimedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Digital Multimedia
The main advantage of trading using opposite Woori Financial and Digital Multimedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Digital Multimedia 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 Digital Multimedia will offset losses from the drop in Digital Multimedia's long position.| Woori Financial vs. Green Cross Medical | Woori Financial vs. Seoul Food Industrial | Woori Financial vs. Sam Yang Foods | Woori Financial vs. Chorokbaem Healthcare Co |
| Digital Multimedia vs. CG Hi Tech | Digital Multimedia vs. Iljin Display | Digital Multimedia vs. Miwon Chemicals Co | Digital Multimedia vs. SK Chemicals 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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