Correlation Between Woori Financial and Asia Technology
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Asia Technology 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 Asia Technology 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 Asia Technology Co, you can compare the effects of market volatilities on Woori Financial and Asia Technology 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 Asia Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Asia Technology.
Diversification Opportunities for Woori Financial and Asia Technology
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Woori and Asia is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Asia Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Technology 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 Asia Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Technology has no effect on the direction of Woori Financial i.e., Woori Financial and Asia Technology go up and down completely randomly.
Pair Corralation between Woori Financial and Asia Technology
Assuming the 90 days trading horizon Woori Financial Group is expected to generate 0.55 times more return on investment than Asia Technology. However, Woori Financial Group is 1.81 times less risky than Asia Technology. It trades about 0.0 of its potential returns per unit of risk. Asia Technology Co is currently generating about -0.18 per unit of risk. If you would invest 1,565,000 in Woori Financial Group on October 24, 2024 and sell it today you would lose (1,000.00) from holding Woori Financial Group or give up 0.06% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Woori Financial Group vs. Asia Technology Co
Performance |
Timeline |
Woori Financial Group |
Asia Technology |
Woori Financial and Asia Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Woori Financial and Asia Technology
The main advantage of trading using opposite Woori Financial and Asia Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Asia Technology 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 Asia Technology will offset losses from the drop in Asia Technology's long position.Woori Financial vs. Hankook Furniture Co | Woori Financial vs. Shinsegae Food | Woori Financial vs. Dongbang Transport Logistics | Woori Financial vs. Organic Special Pet |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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