Correlation Between Woori Financial and Zip Co
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Zip Co 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 Zip Co 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 Zip Co Limited, you can compare the effects of market volatilities on Woori Financial and Zip Co 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 Zip Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Zip Co.
Diversification Opportunities for Woori Financial and Zip Co
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Woori and Zip is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Zip Co Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zip Co Limited 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 Zip Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zip Co Limited has no effect on the direction of Woori Financial i.e., Woori Financial and Zip Co go up and down completely randomly.
Pair Corralation between Woori Financial and Zip Co
Allowing for the 90-day total investment horizon Woori Financial Group is expected to generate 0.25 times more return on investment than Zip Co. However, Woori Financial Group is 4.03 times less risky than Zip Co. It trades about 0.29 of its potential returns per unit of risk. Zip Co Limited is currently generating about -0.07 per unit of risk. If you would invest 3,259 in Woori Financial Group on November 28, 2024 and sell it today you would earn a total of 314.00 from holding Woori Financial Group or generate 9.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Woori Financial Group vs. Zip Co Limited
Performance |
| Timeline |
| Woori Financial Group |
| Zip Co Limited |
Woori Financial and Zip Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Zip Co
The main advantage of trading using opposite Woori Financial and Zip Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Zip Co 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 Zip Co will offset losses from the drop in Zip Co'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 |
| Zip Co vs. Cosmos Group Holdings | Zip Co vs. Regional Management Corp | Zip Co vs. Enova International | Zip Co vs. Open Lending Corp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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