Correlation Between Woori Financial and MPLUS Corp
Can any of the company-specific risk be diversified away by investing in both Woori Financial and MPLUS Corp 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 MPLUS Corp 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 mPLUS Corp, you can compare the effects of market volatilities on Woori Financial and MPLUS Corp 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 MPLUS Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and MPLUS Corp.
Diversification Opportunities for Woori Financial and MPLUS Corp
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and MPLUS is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and mPLUS Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on mPLUS Corp 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 MPLUS Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of mPLUS Corp has no effect on the direction of Woori Financial i.e., Woori Financial and MPLUS Corp go up and down completely randomly.
Pair Corralation between Woori Financial and MPLUS Corp
Assuming the 90 days trading horizon Woori Financial Group is expected to generate 0.51 times more return on investment than MPLUS Corp. However, Woori Financial Group is 1.95 times less risky than MPLUS Corp. It trades about -0.06 of its potential returns per unit of risk. mPLUS Corp is currently generating about -0.16 per unit of risk. If you would invest 1,654,000 in Woori Financial Group on September 13, 2024 and sell it today you would lose (91,000) from holding Woori Financial Group or give up 5.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Financial Group vs. mPLUS Corp
Performance |
| Timeline |
| Woori Financial Group |
| mPLUS Corp |
Woori Financial and MPLUS Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and MPLUS Corp
The main advantage of trading using opposite Woori Financial and MPLUS Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, MPLUS Corp 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 MPLUS Corp will offset losses from the drop in MPLUS Corp's long position.| Woori Financial vs. Shinhan Financial Group | Woori Financial vs. Hana Financial | Woori Financial vs. KakaoBank Corp | Woori Financial vs. Industrial Bank |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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