Correlation Between Woori Financial and Aminologics CoLtd

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

Diversification Opportunities for Woori Financial and Aminologics CoLtd

0.02

Correlation Coefficient

Woori Financial  Aminologics CoLtd

Significant diversification

The 3 months correlation between Woori and Aminologics is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Aminologics CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aminologics CoLtd 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 Aminologics CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aminologics CoLtd has no effect on the direction of Woori Financial i.e., Woori Financial and Aminologics CoLtd go up and down completely randomly.

Pair Corralation between Woori Financial and Aminologics CoLtd

Assuming the 90 days trading horizon Woori Financial Group is expected to generate 1.09 times more return on investment than Aminologics CoLtd. However, Woori Financial is 1.09 times more volatile than Aminologics CoLtd. It trades about 0.16 of its potential returns per unit of risk. Aminologics CoLtd is currently generating about 0.03 per unit of risk. If you would invest  1,478,227  in Woori Financial Group on December 30, 2024 and sell it today you would earn a total of  186,773  from holding Woori Financial Group or generate 12.63% 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.  Aminologics CoLtd

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 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Woori Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Aminologics CoLtd

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aminologics CoLtd are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Aminologics CoLtd is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Woori Financial and Aminologics CoLtd

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

The idea behind Woori Financial Group and Aminologics CoLtd 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.