Correlation Between Woori Financial and BGF Retail
Can any of the company-specific risk be diversified away by investing in both Woori Financial and BGF Retail 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 BGF Retail 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 BGF Retail Co, you can compare the effects of market volatilities on Woori Financial and BGF Retail 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 BGF Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and BGF Retail.
Diversification Opportunities for Woori Financial and BGF Retail
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Woori and BGF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and BGF Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGF Retail 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 BGF Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGF Retail has no effect on the direction of Woori Financial i.e., Woori Financial and BGF Retail go up and down completely randomly.
Pair Corralation between Woori Financial and BGF Retail
Assuming the 90 days trading horizon Woori Financial Group is expected to under-perform the BGF Retail. In addition to that, Woori Financial is 1.0 times more volatile than BGF Retail Co. It trades about -0.2 of its total potential returns per unit of risk. BGF Retail Co is currently generating about -0.13 per unit of volatility. If you would invest 10,900,000 in BGF Retail Co on September 29, 2024 and sell it today you would lose (640,000) from holding BGF Retail Co or give up 5.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Financial Group vs. BGF Retail Co
Performance |
| Timeline |
| Woori Financial Group |
| BGF Retail |
Woori Financial and BGF Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and BGF Retail
The main advantage of trading using opposite Woori Financial and BGF Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, BGF Retail 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 BGF Retail will offset losses from the drop in BGF Retail's long position.| Woori Financial vs. Shinhan Financial Group | Woori Financial vs. Hana Financial | Woori Financial vs. KakaoBank Corp | Woori Financial vs. Industrial Bank |
| BGF Retail vs. Woori Financial Group | BGF Retail vs. Jb Financial | BGF Retail vs. Nh Investment And | BGF Retail vs. Kumho Petro Chemical |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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