Correlation Between Woori Financial and China Rare
Can any of the company-specific risk be diversified away by investing in both Woori Financial and China Rare 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 China Rare 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 China Rare Earth, you can compare the effects of market volatilities on Woori Financial and China Rare 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 China Rare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and China Rare.
Diversification Opportunities for Woori Financial and China Rare
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and China is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and China Rare Earth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Rare Earth 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 China Rare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Rare Earth has no effect on the direction of Woori Financial i.e., Woori Financial and China Rare go up and down completely randomly.
Pair Corralation between Woori Financial and China Rare
Allowing for the 90-day total investment horizon Woori Financial Group is expected to generate 0.22 times more return on investment than China Rare. However, Woori Financial Group is 4.55 times less risky than China Rare. It trades about 0.15 of its potential returns per unit of risk. China Rare Earth is currently generating about 0.03 per unit of risk. If you would invest 3,454 in Woori Financial Group on August 29, 2024 and sell it today you would earn a total of 145.00 from holding Woori Financial Group or generate 4.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Financial Group vs. China Rare Earth
Performance |
| Timeline |
| Woori Financial Group |
| China Rare Earth |
Woori Financial and China Rare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and China Rare
The main advantage of trading using opposite Woori Financial and China Rare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, China Rare 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 China Rare will offset losses from the drop in China Rare's long position.| Woori Financial vs. Shinhan Financial Group | Woori Financial vs. KB Financial Group | Woori Financial vs. Banco De Chile | Woori Financial vs. Orix Corp Ads |
| China Rare vs. Rockridge Resources | China Rare vs. Ameriwest Lithium | China Rare vs. Osisko Metals Incorporated | China Rare vs. Volt Lithium Corp |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |