Correlation Between AEON STORES and WOORI FIN
Can any of the company-specific risk be diversified away by investing in both AEON STORES 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 AEON STORES and WOORI FIN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEON STORES and WOORI FIN GRP, you can compare the effects of market volatilities on AEON STORES 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 AEON STORES with a short position of WOORI FIN. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEON STORES and WOORI FIN.
Diversification Opportunities for AEON STORES and WOORI FIN
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AEON and WOORI is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding AEON STORES 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 AEON STORES 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 AEON STORES 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 AEON STORES i.e., AEON STORES and WOORI FIN go up and down completely randomly.
Pair Corralation between AEON STORES and WOORI FIN
Assuming the 90 days trading horizon AEON STORES is expected to under-perform the WOORI FIN. But the stock apears to be less risky and, when comparing its historical volatility, AEON STORES is 1.22 times less risky than WOORI FIN. The stock trades about -0.01 of its potential returns per unit of risk. The WOORI FIN GRP is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,358 in WOORI FIN GRP on October 15, 2024 and sell it today you would earn a total of 642.00 from holding WOORI FIN GRP or generate 27.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.21% |
| Values | Daily Returns |
AEON STORES vs. WOORI FIN GRP
Performance |
| Timeline |
| AEON STORES |
| WOORI FIN GRP |
AEON STORES and WOORI FIN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEON STORES and WOORI FIN
The main advantage of trading using opposite AEON STORES and WOORI FIN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEON STORES 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.| AEON STORES vs. Perdoceo Education | AEON STORES vs. Ares Management Corp | AEON STORES vs. Coor Service Management | AEON STORES vs. Q2M Managementberatung AG |
| WOORI FIN vs. FAST RETAIL ADR | WOORI FIN vs. BJs Wholesale Club | WOORI FIN vs. Burlington Stores | WOORI FIN vs. AEON STORES |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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