Correlation Between Woori Financial and Xilio Development
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Xilio Development 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 Xilio Development 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 Xilio Development, you can compare the effects of market volatilities on Woori Financial and Xilio Development 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 Xilio Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Xilio Development.
Diversification Opportunities for Woori Financial and Xilio Development
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Woori and Xilio is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Xilio Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xilio Development 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 Xilio Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xilio Development has no effect on the direction of Woori Financial i.e., Woori Financial and Xilio Development go up and down completely randomly.
Pair Corralation between Woori Financial and Xilio Development
Allowing for the 90-day total investment horizon Woori Financial is expected to generate 68.55 times less return on investment than Xilio Development. But when comparing it to its historical volatility, Woori Financial Group is 6.14 times less risky than Xilio Development. It trades about 0.01 of its potential returns per unit of risk. Xilio Development is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 86.00 in Xilio Development on August 24, 2024 and sell it today you would earn a total of 6.00 from holding Xilio Development or generate 6.98% 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. Xilio Development
Performance |
| Timeline |
| Woori Financial Group |
| Xilio Development |
Woori Financial and Xilio Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Xilio Development
The main advantage of trading using opposite Woori Financial and Xilio Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Xilio Development 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 Xilio Development will offset losses from the drop in Xilio Development's long position.| Woori Financial vs. Banco Bradesco SA | Woori Financial vs. Itau Unibanco Banco | Woori Financial vs. Banco Santander Brasil | Woori Financial vs. Western Alliance Bancorporation |
| Xilio Development vs. Lyra Therapeutics | Xilio Development vs. Hookipa Pharma | Xilio Development vs. Cingulate Warrants | Xilio Development vs. SAB Biotherapeutics |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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