Correlation Between Woori Financial and FDCTech
Can any of the company-specific risk be diversified away by investing in both Woori Financial and FDCTech 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 FDCTech 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 FDCTech, you can compare the effects of market volatilities on Woori Financial and FDCTech 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 FDCTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and FDCTech.
Diversification Opportunities for Woori Financial and FDCTech
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Woori and FDCTech is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and FDCTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FDCTech 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 FDCTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FDCTech has no effect on the direction of Woori Financial i.e., Woori Financial and FDCTech go up and down completely randomly.
Pair Corralation between Woori Financial and FDCTech
Allowing for the 90-day total investment horizon Woori Financial is expected to generate 130.07 times less return on investment than FDCTech. But when comparing it to its historical volatility, Woori Financial Group is 188.41 times less risky than FDCTech. It trades about 0.28 of its potential returns per unit of risk. FDCTech is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 0.70 in FDCTech on September 1, 2024 and sell it today you would lose (0.20) from holding FDCTech or give up 28.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Woori Financial Group vs. FDCTech
Performance |
| Timeline |
| Woori Financial Group |
| FDCTech |
Woori Financial and FDCTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and FDCTech
The main advantage of trading using opposite Woori Financial and FDCTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, FDCTech 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 FDCTech will offset losses from the drop in FDCTech's long position.| Woori Financial vs. Banco Santander Brasil | Woori Financial vs. CrossFirst Bankshares | Woori Financial vs. Banco Bradesco SA | Woori Financial vs. CF Bankshares |
| FDCTech vs. Armada Mercantile | FDCTech vs. Cal Bay Intl | FDCTech vs. BlockchainK2 Corp | FDCTech vs. Ameritrust 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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