Correlation Between M/I Homes and WOORI FIN
Can any of the company-specific risk be diversified away by investing in both M/I Homes and WOORI FIN 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 M/I Homes and WOORI FIN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MI Homes and WOORI FIN GRP, you can compare the effects of market volatilities on M/I Homes and WOORI FIN 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 M/I Homes with a short position of WOORI FIN. Check out your portfolio center. Please also check ongoing floating volatility patterns of M/I Homes and WOORI FIN.
Diversification Opportunities for M/I Homes and WOORI FIN
Very weak diversification
The 3 months correlation between M/I and WOORI is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding MI Homes and WOORI FIN GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WOORI FIN GRP and M/I Homes 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 MI Homes are associated (or correlated) with WOORI FIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WOORI FIN GRP has no effect on the direction of M/I Homes i.e., M/I Homes and WOORI FIN go up and down completely randomly.
Pair Corralation between M/I Homes and WOORI FIN
Assuming the 90 days horizon MI Homes is expected to generate 0.62 times more return on investment than WOORI FIN. However, MI Homes is 1.61 times less risky than WOORI FIN. It trades about 0.12 of its potential returns per unit of risk. WOORI FIN GRP is currently generating about 0.04 per unit of risk. If you would invest 4,440 in MI Homes on September 13, 2024 and sell it today you would earn a total of 10,720 from holding MI Homes or generate 241.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.02% |
| Values | Daily Returns |
MI Homes vs. WOORI FIN GRP
Performance |
| Timeline |
| M/I Homes |
| WOORI FIN GRP |
M/I Homes and WOORI FIN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with M/I Homes and WOORI FIN
The main advantage of trading using opposite M/I Homes and WOORI FIN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if M/I Homes position performs unexpectedly, WOORI FIN 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 FIN will offset losses from the drop in WOORI FIN's long position.The idea behind MI Homes and WOORI FIN GRP pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| WOORI FIN vs. ULTRA CLEAN HLDGS | WOORI FIN vs. MI Homes | WOORI FIN vs. Cleanaway Waste Management | WOORI FIN vs. PRECISION DRILLING P |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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