Correlation Between METHODE ELECTRONICS and WOORI FIN
Can any of the company-specific risk be diversified away by investing in both METHODE ELECTRONICS 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 METHODE ELECTRONICS and WOORI FIN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between METHODE ELECTRONICS and WOORI FIN GRP, you can compare the effects of market volatilities on METHODE ELECTRONICS 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 METHODE ELECTRONICS with a short position of WOORI FIN. Check out your portfolio center. Please also check ongoing floating volatility patterns of METHODE ELECTRONICS and WOORI FIN.
Diversification Opportunities for METHODE ELECTRONICS and WOORI FIN
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between METHODE and WOORI is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding METHODE ELECTRONICS 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 METHODE ELECTRONICS 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 METHODE ELECTRONICS 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 METHODE ELECTRONICS i.e., METHODE ELECTRONICS and WOORI FIN go up and down completely randomly.
Pair Corralation between METHODE ELECTRONICS and WOORI FIN
Assuming the 90 days trading horizon METHODE ELECTRONICS is expected to generate 2.96 times more return on investment than WOORI FIN. However, METHODE ELECTRONICS is 2.96 times more volatile than WOORI FIN GRP. It trades about 0.08 of its potential returns per unit of risk. WOORI FIN GRP is currently generating about -0.06 per unit of risk. If you would invest 1,097 in METHODE ELECTRONICS on October 22, 2024 and sell it today you would earn a total of 43.00 from holding METHODE ELECTRONICS or generate 3.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
METHODE ELECTRONICS vs. WOORI FIN GRP
Performance |
| Timeline |
| METHODE ELECTRONICS |
| WOORI FIN GRP |
METHODE ELECTRONICS and WOORI FIN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with METHODE ELECTRONICS and WOORI FIN
The main advantage of trading using opposite METHODE ELECTRONICS and WOORI FIN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if METHODE ELECTRONICS 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.| METHODE ELECTRONICS vs. Highlight Communications AG | METHODE ELECTRONICS vs. ecotel communication ag | METHODE ELECTRONICS vs. COMBA TELECOM SYST | METHODE ELECTRONICS vs. Citic Telecom International |
| WOORI FIN vs. POSBO UNSPADRS20YC1 | WOORI FIN vs. Postal Savings Bank | WOORI FIN vs. Truist Financial | WOORI FIN vs. OVERSEA CHINUNSPADR2 |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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