Correlation Between WOORI FIN and Beazley PLC

Can any of the company-specific risk be diversified away by investing in both WOORI FIN and Beazley PLC 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 FIN and Beazley PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between WOORI FIN GRP and Beazley PLC, you can compare the effects of market volatilities on WOORI FIN and Beazley PLC 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 FIN with a short position of Beazley PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of WOORI FIN and Beazley PLC.

Diversification Opportunities for WOORI FIN and Beazley PLC

-0.42

Correlation Coefficient

WOORI FIN  Beazley PLC

Very good diversification

The 3 months correlation between WOORI and Beazley is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding WOORI FIN GRP and Beazley PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beazley PLC and WOORI FIN 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 FIN GRP are associated (or correlated) with Beazley PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beazley PLC has no effect on the direction of WOORI FIN i.e., WOORI FIN and Beazley PLC go up and down completely randomly.

Pair Corralation between WOORI FIN and Beazley PLC

Assuming the 90 days trading horizon WOORI FIN is expected to generate 1.55 times less return on investment than Beazley PLC. In addition to that, WOORI FIN is 1.19 times more volatile than Beazley PLC. It trades about 0.04 of its total potential returns per unit of risk. Beazley PLC is currently generating about 0.06 per unit of volatility. If you would invest  724.00  in Beazley PLC on October 22, 2024 and sell it today you would earn a total of  261.00  from holding Beazley PLC or generate 36.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.68%
Values	Daily Returns

WOORI FIN GRP  vs.  Beazley PLC

WOORI FIN GRP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WOORI FIN GRP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Beazley PLC

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Beazley PLC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Beazley PLC may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with WOORI FIN and Beazley PLC

The main advantage of trading using opposite WOORI FIN and Beazley PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WOORI FIN position performs unexpectedly, Beazley PLC 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 Beazley PLC will offset losses from the drop in Beazley PLC's long position.

The idea behind WOORI FIN GRP and Beazley PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .