Correlation Between Woori Financial and Rainbow Robotics
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Rainbow Robotics 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 Rainbow Robotics 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 Rainbow Robotics, you can compare the effects of market volatilities on Woori Financial and Rainbow Robotics 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 Rainbow Robotics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Rainbow Robotics.
Diversification Opportunities for Woori Financial and Rainbow Robotics
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Rainbow is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Rainbow Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rainbow Robotics 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 Rainbow Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rainbow Robotics has no effect on the direction of Woori Financial i.e., Woori Financial and Rainbow Robotics go up and down completely randomly.
Pair Corralation between Woori Financial and Rainbow Robotics
Assuming the 90 days trading horizon Woori Financial Group is expected to under-perform the Rainbow Robotics. But the stock apears to be less risky and, when comparing its historical volatility, Woori Financial Group is 12.92 times less risky than Rainbow Robotics. The stock trades about -0.05 of its potential returns per unit of risk. The Rainbow Robotics is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 13,480,000 in Rainbow Robotics on October 23, 2024 and sell it today you would earn a total of 12,420,000 from holding Rainbow Robotics or generate 92.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Woori Financial Group vs. Rainbow Robotics
Performance |
| Timeline |
| Woori Financial Group |
| Rainbow Robotics |
Woori Financial and Rainbow Robotics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Rainbow Robotics
The main advantage of trading using opposite Woori Financial and Rainbow Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Rainbow Robotics 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 Rainbow Robotics will offset losses from the drop in Rainbow Robotics' long position.| Woori Financial vs. Daejung Chemicals Metals | Woori Financial vs. Namhwa Industrial Co | Woori Financial vs. Cloud Air CoLtd | Woori Financial vs. Seoul Semiconductor Co |
| Rainbow Robotics vs. Daewoo Electronic Components | Rainbow Robotics vs. ABCO Electronics Co | Rainbow Robotics vs. SBI Investment KOREA | Rainbow Robotics vs. UJU Electronics 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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