Correlation Between Woori Financial and Elentec

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

Diversification Opportunities for Woori Financial and Elentec

-0.09

Correlation Coefficient

Woori Financial  Elentec

Good diversification

The 3 months correlation between Woori and Elentec is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Elentec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elentec 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 Elentec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elentec has no effect on the direction of Woori Financial i.e., Woori Financial and Elentec go up and down completely randomly.

Pair Corralation between Woori Financial and Elentec

Assuming the 90 days trading horizon Woori Financial Group is expected to generate 0.54 times more return on investment than Elentec. However, Woori Financial Group is 1.86 times less risky than Elentec. It trades about 0.14 of its potential returns per unit of risk. Elentec Co is currently generating about 0.04 per unit of risk. If you would invest  1,513,812  in Woori Financial Group on December 24, 2024 and sell it today you would earn a total of  165,188  from holding Woori Financial Group or generate 10.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.28%
Values	Daily Returns

Woori Financial Group  vs.  Elentec Co

Woori Financial Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Woori Financial Group are ranked lower than 10 (%) 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.

Elentec

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Woori Financial and Elentec

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

The idea behind Woori Financial Group and Elentec 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.