Correlation Between Woori Financial and MedMira
Can any of the company-specific risk be diversified away by investing in both Woori Financial and MedMira 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 MedMira 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 MedMira, you can compare the effects of market volatilities on Woori Financial and MedMira 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 MedMira. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and MedMira.
Diversification Opportunities for Woori Financial and MedMira
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Woori and MedMira is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and MedMira in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MedMira 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 MedMira. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MedMira has no effect on the direction of Woori Financial i.e., Woori Financial and MedMira go up and down completely randomly.
Pair Corralation between Woori Financial and MedMira
Allowing for the 90-day total investment horizon Woori Financial Group is expected to generate 0.76 times more return on investment than MedMira. However, Woori Financial Group is 1.31 times less risky than MedMira. It trades about 0.1 of its potential returns per unit of risk. MedMira is currently generating about -0.01 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 92.00 from holding Woori Financial Group or generate 2.66% 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. MedMira
Performance |
| Timeline |
| Woori Financial Group |
| MedMira |
Woori Financial and MedMira Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and MedMira
The main advantage of trading using opposite Woori Financial and MedMira positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, MedMira 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 MedMira will offset losses from the drop in MedMira'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 |
| MedMira vs. Rezolute | MedMira vs. Tempest Therapeutics | MedMira vs. Forte Biosciences | MedMira vs. Dyadic International |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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