Correlation Between Woori Financial and Ensign Energy
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Ensign Energy 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 Ensign Energy 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 Ensign Energy Services, you can compare the effects of market volatilities on Woori Financial and Ensign Energy 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 Ensign Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Ensign Energy.
Diversification Opportunities for Woori Financial and Ensign Energy
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Ensign is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Ensign Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ensign Energy Services 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 Ensign Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ensign Energy Services has no effect on the direction of Woori Financial i.e., Woori Financial and Ensign Energy go up and down completely randomly.
Pair Corralation between Woori Financial and Ensign Energy
Allowing for the 90-day total investment horizon Woori Financial is expected to generate 1.36 times less return on investment than Ensign Energy. But when comparing it to its historical volatility, Woori Financial Group is 1.4 times less risky than Ensign Energy. It trades about 0.07 of its potential returns per unit of risk. Ensign Energy Services is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 171.00 in Ensign Energy Services on August 29, 2024 and sell it today you would earn a total of 38.00 from holding Ensign Energy Services or generate 22.22% 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. Ensign Energy Services
Performance |
| Timeline |
| Woori Financial Group |
| Ensign Energy Services |
Woori Financial and Ensign Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Ensign Energy
The main advantage of trading using opposite Woori Financial and Ensign Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Ensign Energy 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 Ensign Energy will offset losses from the drop in Ensign Energy'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 |
| Ensign Energy vs. Patterson UTI Energy | Ensign Energy vs. Noble plc | Ensign Energy vs. Helmerich and Payne | Ensign Energy vs. Precision Drilling |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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