Correlation Between Woori Financial and Ioneer
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Ioneer 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 Ioneer 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 ioneer, you can compare the effects of market volatilities on Woori Financial and Ioneer 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 Ioneer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Ioneer.
Diversification Opportunities for Woori Financial and Ioneer
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Ioneer is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and ioneer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ioneer 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 Ioneer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ioneer has no effect on the direction of Woori Financial i.e., Woori Financial and Ioneer go up and down completely randomly.
Pair Corralation between Woori Financial and Ioneer
Allowing for the 90-day total investment horizon Woori Financial is expected to generate 1.9 times less return on investment than Ioneer. But when comparing it to its historical volatility, Woori Financial Group is 5.03 times less risky than Ioneer. It trades about 0.07 of its potential returns per unit of risk. ioneer is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 22.00 in ioneer on August 26, 2024 and sell it today you would lose (8.00) from holding ioneer or give up 36.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Financial Group vs. ioneer
Performance |
| Timeline |
| Woori Financial Group |
| ioneer |
Woori Financial and Ioneer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Ioneer
The main advantage of trading using opposite Woori Financial and Ioneer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Ioneer 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 Ioneer will offset losses from the drop in Ioneer'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 |
| Ioneer vs. Norra Metals Corp | Ioneer vs. ZincX Resources Corp | Ioneer vs. Nuinsco Resources Limited | Ioneer vs. South Star Battery |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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