Correlation Between Woori Financial and Samwha Electronics

Can any of the company-specific risk be diversified away by investing in both Woori Financial and Samwha Electronics 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 Samwha Electronics 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 Samwha Electronics Co, you can compare the effects of market volatilities on Woori Financial and Samwha Electronics 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 Samwha Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Samwha Electronics.

Diversification Opportunities for Woori Financial and Samwha Electronics

0.17

Correlation Coefficient

Woori Financial  Samwha Electronics

Average diversification

The 3 months correlation between Woori and Samwha is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Samwha Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samwha Electronics 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 Samwha Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samwha Electronics has no effect on the direction of Woori Financial i.e., Woori Financial and Samwha Electronics go up and down completely randomly.

Pair Corralation between Woori Financial and Samwha Electronics

Assuming the 90 days trading horizon Woori Financial is expected to generate 2.79 times less return on investment than Samwha Electronics. But when comparing it to its historical volatility, Woori Financial Group is 2.7 times less risky than Samwha Electronics. It trades about 0.14 of its potential returns per unit of risk. Samwha Electronics Co is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  315,500  in Samwha Electronics Co on December 23, 2024 and sell it today you would earn a total of  103,000  from holding Samwha Electronics Co or generate 32.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Woori Financial Group  vs.  Samwha Electronics Co

Woori Financial Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Woori Financial Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Woori Financial may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Samwha Electronics

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Samwha Electronics Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Samwha Electronics sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Woori Financial and Samwha Electronics

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

The idea behind Woori Financial Group and Samwha Electronics Co 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.