Correlation Between Woori Financial and Akero Therapeutics
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Akero Therapeutics 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 Woori Financial and Akero Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woori Financial Group and Akero Therapeutics, you can compare the effects of market volatilities on Woori Financial and Akero Therapeutics 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 Woori Financial with a short position of Akero Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Akero Therapeutics.
Diversification Opportunities for Woori Financial and Akero Therapeutics
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Akero is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Akero Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akero Therapeutics and Woori Financial 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 Woori Financial Group are associated (or correlated) with Akero Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akero Therapeutics has no effect on the direction of Woori Financial i.e., Woori Financial and Akero Therapeutics go up and down completely randomly.
Pair Corralation between Woori Financial and Akero Therapeutics
Allowing for the 90-day total investment horizon Woori Financial is expected to generate 1.04 times less return on investment than Akero Therapeutics. But when comparing it to its historical volatility, Woori Financial Group is 3.09 times less risky than Akero Therapeutics. It trades about 0.1 of its potential returns per unit of risk. Akero Therapeutics is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,173 in Akero Therapeutics on August 30, 2024 and sell it today you would earn a total of 44.00 from holding Akero Therapeutics or generate 1.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Financial Group vs. Akero Therapeutics
Performance |
| Timeline |
| Woori Financial Group |
| Akero Therapeutics |
Woori Financial and Akero Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Akero Therapeutics
The main advantage of trading using opposite Woori Financial and Akero Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Akero Therapeutics 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 Akero Therapeutics will offset losses from the drop in Akero Therapeutics' long position.| Woori Financial vs. JPMorgan Chase Co | Woori Financial vs. Citigroup | Woori Financial vs. Wells Fargo | Woori Financial vs. Toronto Dominion Bank |
| Akero Therapeutics vs. Terns Pharmaceuticals | Akero Therapeutics vs. Madrigal Pharmaceuticals | Akero Therapeutics vs. Inozyme Pharma | Akero Therapeutics vs. Viking Therapeutics |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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