Correlation Between Woori Financial and Vulcan Energy
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Vulcan 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 Vulcan 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 Vulcan Energy Resources, you can compare the effects of market volatilities on Woori Financial and Vulcan 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 Vulcan Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Vulcan Energy.
Diversification Opportunities for Woori Financial and Vulcan Energy
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Woori and Vulcan is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Vulcan Energy Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vulcan Energy Resources 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 Vulcan Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vulcan Energy Resources has no effect on the direction of Woori Financial i.e., Woori Financial and Vulcan Energy go up and down completely randomly.
Pair Corralation between Woori Financial and Vulcan Energy
Allowing for the 90-day total investment horizon Woori Financial is expected to generate 6.95 times less return on investment than Vulcan Energy. But when comparing it to its historical volatility, Woori Financial Group is 10.09 times less risky than Vulcan Energy. It trades about 0.28 of its potential returns per unit of risk. Vulcan Energy Resources is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 350.00 in Vulcan Energy Resources on September 1, 2024 and sell it today you would earn a total of 131.00 from holding Vulcan Energy Resources or generate 37.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Financial Group vs. Vulcan Energy Resources
Performance |
| Timeline |
| Woori Financial Group |
| Vulcan Energy Resources |
Woori Financial and Vulcan Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Vulcan Energy
The main advantage of trading using opposite Woori Financial and Vulcan Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Vulcan 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 Vulcan Energy will offset losses from the drop in Vulcan Energy'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 |
| Vulcan Energy vs. Liontown Resources Limited | Vulcan Energy vs. ATT Inc | Vulcan Energy vs. Merck Company | Vulcan Energy vs. Walt Disney |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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