Correlation Between NYSE Composite and Woori Financial
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Woori Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Woori Financial Group, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Woori Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Woori Financial.
Diversification Opportunities for NYSE Composite and Woori Financial
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and Woori is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Woori Financial go up and down completely randomly.
Pair Corralation between NYSE Composite and Woori Financial
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.26 times less return on investment than Woori Financial. But when comparing it to its historical volatility, NYSE Composite is 1.79 times less risky than Woori Financial. It trades about 0.21 of its potential returns per unit of risk. Woori Financial Group is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3,454 in Woori Financial Group on August 27, 2024 and sell it today you would earn a total of 125.00 from holding Woori Financial Group or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Woori Financial Group
Performance |
| Timeline |
NYSE Composite and Woori Financial Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Woori Financial Group
Pair trading matchups for Woori Financial
Pair Trading with NYSE Composite and Woori Financial
The main advantage of trading using opposite NYSE Composite and Woori Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| Woori Financial vs. Banco Santander Brasil | Woori Financial vs. CrossFirst Bankshares | Woori Financial vs. Banco Bradesco SA | Woori Financial vs. CF Bankshares |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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