Correlation Between Woori Financial and DSC Investment
Can any of the company-specific risk be diversified away by investing in both Woori Financial and DSC Investment 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 DSC Investment 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 DSC Investment, you can compare the effects of market volatilities on Woori Financial and DSC Investment 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 DSC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and DSC Investment.
Diversification Opportunities for Woori Financial and DSC Investment
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Woori and DSC is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and DSC Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DSC Investment 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 DSC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DSC Investment has no effect on the direction of Woori Financial i.e., Woori Financial and DSC Investment go up and down completely randomly.
Pair Corralation between Woori Financial and DSC Investment
Assuming the 90 days trading horizon Woori Financial Group is expected to generate 0.15 times more return on investment than DSC Investment. However, Woori Financial Group is 6.62 times less risky than DSC Investment. It trades about 0.11 of its potential returns per unit of risk. DSC Investment is currently generating about -0.06 per unit of risk. If you would invest 1,611,000 in Woori Financial Group on January 7, 2025 and sell it today you would earn a total of 33,000 from holding Woori Financial Group or generate 2.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Financial Group vs. DSC Investment
Performance |
| Timeline |
| Woori Financial Group |
| DSC Investment |
Woori Financial and DSC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and DSC Investment
The main advantage of trading using opposite Woori Financial and DSC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, DSC Investment 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 DSC Investment will offset losses from the drop in DSC Investment's long position.| Woori Financial vs. Daedong Metals Co | Woori Financial vs. Wing Yip Food | Woori Financial vs. Youngsin Metal Industrial | Woori Financial vs. CJ Seafood Corp |
| DSC Investment vs. Nh Investment And | DSC Investment vs. Hanwha InvestmentSecurities Co | DSC Investment vs. Company K Partners | DSC Investment vs. FnGuide |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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