Correlation Between Woori Financial and LAKE MATERIALS
Can any of the company-specific risk be diversified away by investing in both Woori Financial and LAKE MATERIALS 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 LAKE MATERIALS 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 LAKE MATERIALS LTD, you can compare the effects of market volatilities on Woori Financial and LAKE MATERIALS 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 LAKE MATERIALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and LAKE MATERIALS.
Diversification Opportunities for Woori Financial and LAKE MATERIALS
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Woori and LAKE is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and LAKE MATERIALS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LAKE MATERIALS LTD 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 LAKE MATERIALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LAKE MATERIALS LTD has no effect on the direction of Woori Financial i.e., Woori Financial and LAKE MATERIALS go up and down completely randomly.
Pair Corralation between Woori Financial and LAKE MATERIALS
Assuming the 90 days trading horizon Woori Financial Group is expected to under-perform the LAKE MATERIALS. But the stock apears to be less risky and, when comparing its historical volatility, Woori Financial Group is 2.35 times less risky than LAKE MATERIALS. The stock trades about -0.09 of its potential returns per unit of risk. The LAKE MATERIALS LTD is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,188,000 in LAKE MATERIALS LTD on October 30, 2024 and sell it today you would earn a total of 4,000 from holding LAKE MATERIALS LTD or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Financial Group vs. LAKE MATERIALS LTD
Performance |
| Timeline |
| Woori Financial Group |
| LAKE MATERIALS LTD |
Woori Financial and LAKE MATERIALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and LAKE MATERIALS
The main advantage of trading using opposite Woori Financial and LAKE MATERIALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, LAKE MATERIALS 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 LAKE MATERIALS will offset losses from the drop in LAKE MATERIALS's long position.| Woori Financial vs. Leaders Technology Investment | Woori Financial vs. Golden Bridge Investment | Woori Financial vs. Woori Technology Investment | Woori Financial vs. DB Financial Investment |
| LAKE MATERIALS vs. Sangsangin Investment Securities | LAKE MATERIALS vs. Seers Technology | LAKE MATERIALS vs. BIT Computer Co | LAKE MATERIALS vs. HB Technology TD |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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