Correlation Between KakaoBank Corp and Woori Financial
Can any of the company-specific risk be diversified away by investing in both KakaoBank Corp and Woori Financial 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 KakaoBank Corp and Woori Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KakaoBank Corp and Woori Financial Group, you can compare the effects of market volatilities on KakaoBank Corp and Woori Financial 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 KakaoBank Corp with a short position of Woori Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of KakaoBank Corp and Woori Financial.
Diversification Opportunities for KakaoBank Corp and Woori Financial
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KakaoBank and Woori is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding KakaoBank Corp and Woori Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Financial Group and KakaoBank Corp 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 KakaoBank Corp are associated (or correlated) with Woori Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woori Financial Group has no effect on the direction of KakaoBank Corp i.e., KakaoBank Corp and Woori Financial go up and down completely randomly.
Pair Corralation between KakaoBank Corp and Woori Financial
Assuming the 90 days trading horizon KakaoBank Corp is expected to under-perform the Woori Financial. In addition to that, KakaoBank Corp is 1.67 times more volatile than Woori Financial Group. It trades about 0.0 of its total potential returns per unit of risk. Woori Financial Group is currently generating about 0.07 per unit of volatility. If you would invest 1,035,723 in Woori Financial Group on August 28, 2024 and sell it today you would earn a total of 649,277 from holding Woori Financial Group or generate 62.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KakaoBank Corp vs. Woori Financial Group
Performance |
| Timeline |
| KakaoBank Corp |
| Woori Financial Group |
KakaoBank Corp and Woori Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KakaoBank Corp and Woori Financial
The main advantage of trading using opposite KakaoBank Corp and Woori Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KakaoBank Corp position performs unexpectedly, Woori Financial 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 Woori Financial will offset losses from the drop in Woori Financial's long position.| KakaoBank Corp vs. Konan Technology | KakaoBank Corp vs. INFINITT Healthcare Co | KakaoBank Corp vs. CU Tech Corp | KakaoBank Corp vs. Eagle Veterinary Technology |
| Woori Financial vs. Automobile Pc | Woori Financial vs. Daishin Information Communications | Woori Financial vs. Pureun Mutual Savings | Woori Financial vs. Alton Sports CoLtd |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |