Correlation Between Woori Financial and Maeil Dairies
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Maeil Dairies 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 Maeil Dairies 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 Maeil Dairies Co, you can compare the effects of market volatilities on Woori Financial and Maeil Dairies 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 Maeil Dairies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Maeil Dairies.
Diversification Opportunities for Woori Financial and Maeil Dairies
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Woori and Maeil is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Maeil Dairies Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maeil Dairies 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 Maeil Dairies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maeil Dairies has no effect on the direction of Woori Financial i.e., Woori Financial and Maeil Dairies go up and down completely randomly.
Pair Corralation between Woori Financial and Maeil Dairies
Assuming the 90 days trading horizon Woori Financial Group is expected to generate 1.33 times more return on investment than Maeil Dairies. However, Woori Financial is 1.33 times more volatile than Maeil Dairies Co. It trades about 0.13 of its potential returns per unit of risk. Maeil Dairies Co is currently generating about -0.04 per unit of risk. If you would invest 1,606,000 in Woori Financial Group on August 29, 2024 and sell it today you would earn a total of 57,000 from holding Woori Financial Group or generate 3.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Financial Group vs. Maeil Dairies Co
Performance |
| Timeline |
| Woori Financial Group |
| Maeil Dairies |
Woori Financial and Maeil Dairies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Maeil Dairies
The main advantage of trading using opposite Woori Financial and Maeil Dairies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Maeil Dairies 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 Maeil Dairies will offset losses from the drop in Maeil Dairies' long position.| Woori Financial vs. Korea Shipbuilding Offshore | Woori Financial vs. Jeong Moon Information | Woori Financial vs. Shinsegae Information Communication | Woori Financial vs. Daishin Information Communications |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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