Correlation Between Woori Financial and Innovative Food
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Innovative Food 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 Innovative Food 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 Innovative Food Hldg, you can compare the effects of market volatilities on Woori Financial and Innovative Food 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 Innovative Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Innovative Food.
Diversification Opportunities for Woori Financial and Innovative Food
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Innovative is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Innovative Food Hldg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovative Food Hldg 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 Innovative Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovative Food Hldg has no effect on the direction of Woori Financial i.e., Woori Financial and Innovative Food go up and down completely randomly.
Pair Corralation between Woori Financial and Innovative Food
Allowing for the 90-day total investment horizon Woori Financial is expected to generate 2.89 times less return on investment than Innovative Food. But when comparing it to its historical volatility, Woori Financial Group is 2.41 times less risky than Innovative Food. It trades about 0.08 of its potential returns per unit of risk. Innovative Food Hldg is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 70.00 in Innovative Food Hldg on September 4, 2024 and sell it today you would earn a total of 100.00 from holding Innovative Food Hldg or generate 142.86% 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. Innovative Food Hldg
Performance |
| Timeline |
| Woori Financial Group |
| Innovative Food Hldg |
Woori Financial and Innovative Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Innovative Food
The main advantage of trading using opposite Woori Financial and Innovative Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Innovative Food 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 Innovative Food will offset losses from the drop in Innovative Food'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 |
| Innovative Food vs. Organto Foods | Innovative Food vs. Colabor Group | Innovative Food vs. Bunzl plc | Innovative Food vs. Hf Foods Group |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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