Correlation Between Woori Financial and Shinhan Inverse
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Shinhan Inverse 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 Shinhan Inverse 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 Shinhan Inverse Copper, you can compare the effects of market volatilities on Woori Financial and Shinhan Inverse 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 Shinhan Inverse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Shinhan Inverse.
Diversification Opportunities for Woori Financial and Shinhan Inverse
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Woori and Shinhan is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Shinhan Inverse Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Inverse Copper 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 Shinhan Inverse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinhan Inverse Copper has no effect on the direction of Woori Financial i.e., Woori Financial and Shinhan Inverse go up and down completely randomly.
Pair Corralation between Woori Financial and Shinhan Inverse
Assuming the 90 days trading horizon Woori Financial Group is expected to generate 0.44 times more return on investment than Shinhan Inverse. However, Woori Financial Group is 2.25 times less risky than Shinhan Inverse. It trades about 0.38 of its potential returns per unit of risk. Shinhan Inverse Copper is currently generating about -0.14 per unit of risk. If you would invest 1,543,000 in Woori Financial Group on November 5, 2024 and sell it today you would earn a total of 67,000 from holding Woori Financial Group or generate 4.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
Woori Financial Group vs. Shinhan Inverse Copper
Performance |
| Timeline |
| Woori Financial Group |
| Shinhan Inverse Copper |
Woori Financial and Shinhan Inverse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Shinhan Inverse
The main advantage of trading using opposite Woori Financial and Shinhan Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Shinhan Inverse 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 Shinhan Inverse will offset losses from the drop in Shinhan Inverse's long position.| Woori Financial vs. ENF Technology Co | Woori Financial vs. FoodNamoo | Woori Financial vs. Sempio Foods Co | Woori Financial vs. Bosung Power Technology |
| Shinhan Inverse vs. Hyundai Engineering Plastics | Shinhan Inverse vs. Korea Information Communications | Shinhan Inverse vs. ABOV Semiconductor Co | Shinhan Inverse vs. LG Household Healthcare |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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