Correlation Between Woori Financial and Hyundai
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Hyundai 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 Hyundai 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 Hyundai Motor Co, you can compare the effects of market volatilities on Woori Financial and Hyundai 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 Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Hyundai.
Diversification Opportunities for Woori Financial and Hyundai
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Woori and Hyundai is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Hyundai Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor 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 Hyundai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Motor has no effect on the direction of Woori Financial i.e., Woori Financial and Hyundai go up and down completely randomly.
Pair Corralation between Woori Financial and Hyundai
Assuming the 90 days trading horizon Woori Financial Group is expected to under-perform the Hyundai. In addition to that, Woori Financial is 1.0 times more volatile than Hyundai Motor Co. It trades about -0.17 of its total potential returns per unit of risk. Hyundai Motor Co is currently generating about -0.12 per unit of volatility. If you would invest 16,350,000 in Hyundai Motor Co on September 24, 2024 and sell it today you would lose (850,000) from holding Hyundai Motor Co or give up 5.2% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Woori Financial Group vs. Hyundai Motor Co
Performance |
Timeline |
Woori Financial Group |
Hyundai Motor |
Woori Financial and Hyundai Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Woori Financial and Hyundai
The main advantage of trading using opposite Woori Financial and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Hyundai 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 Hyundai will offset losses from the drop in Hyundai's long position.Woori Financial vs. Shinhan Financial Group | Woori Financial vs. Hana Financial | Woori Financial vs. KakaoBank Corp | Woori Financial vs. Industrial Bank |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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