Correlation Between Woori Financial and Dgb Financial
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Dgb Financial 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 Dgb Financial 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 Dgb Financial, you can compare the effects of market volatilities on Woori Financial and Dgb Financial 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 Dgb Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Dgb Financial.
Diversification Opportunities for Woori Financial and Dgb Financial
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Woori and Dgb is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Dgb Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dgb Financial 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 Dgb Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dgb Financial has no effect on the direction of Woori Financial i.e., Woori Financial and Dgb Financial go up and down completely randomly.
Pair Corralation between Woori Financial and Dgb Financial
Assuming the 90 days trading horizon Woori Financial is expected to generate 2.07 times less return on investment than Dgb Financial. But when comparing it to its historical volatility, Woori Financial Group is 1.08 times less risky than Dgb Financial. It trades about 0.44 of its potential returns per unit of risk. Dgb Financial is currently generating about 0.84 of returns per unit of risk over similar time horizon. If you would invest 825,000 in Dgb Financial on November 4, 2024 and sell it today you would earn a total of 97,000 from holding Dgb Financial or generate 11.76% 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. Dgb Financial
Performance |
| Timeline |
| Woori Financial Group |
| Dgb Financial |
Woori Financial and Dgb Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Dgb Financial
The main advantage of trading using opposite Woori Financial and Dgb Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Dgb Financial 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 Dgb Financial will offset losses from the drop in Dgb Financial's long position.| Woori Financial vs. ENF Technology Co | Woori Financial vs. FoodNamoo | Woori Financial vs. Sempio Foods Co | Woori Financial vs. Bosung Power Technology |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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