Correlation Between Woori Financial and Samsung Special
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Samsung Special 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 Samsung Special 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 Samsung Special Purpose, you can compare the effects of market volatilities on Woori Financial and Samsung Special 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 Samsung Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Samsung Special.
Diversification Opportunities for Woori Financial and Samsung Special
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Woori and Samsung is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Samsung Special Purpose in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Special Purpose 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 Samsung Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Special Purpose has no effect on the direction of Woori Financial i.e., Woori Financial and Samsung Special go up and down completely randomly.
Pair Corralation between Woori Financial and Samsung Special
Assuming the 90 days trading horizon Woori Financial Group is expected to generate 0.76 times more return on investment than Samsung Special. However, Woori Financial Group is 1.32 times less risky than Samsung Special. It trades about 0.06 of its potential returns per unit of risk. Samsung Special Purpose is currently generating about -0.03 per unit of risk. If you would invest 1,068,866 in Woori Financial Group on September 12, 2024 and sell it today you would earn a total of 475,134 from holding Woori Financial Group or generate 44.45% 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. Samsung Special Purpose
Performance |
| Timeline |
| Woori Financial Group |
| Samsung Special Purpose |
Woori Financial and Samsung Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Samsung Special
The main advantage of trading using opposite Woori Financial and Samsung Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Samsung Special 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 Samsung Special will offset losses from the drop in Samsung Special's long position.| Woori Financial vs. DB Insurance Co | Woori Financial vs. Pureun Mutual Savings | Woori Financial vs. Shinhan Financial Group | Woori Financial vs. iNtRON Biotechnology |
| Samsung Special vs. Daewon Media Co | Samsung Special vs. DC Media Co | Samsung Special vs. Next Entertainment World | Samsung Special vs. Daejung Chemicals Metals |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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