Correlation Between Woori Financial and Ewon Comfortech

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

Diversification Opportunities for Woori Financial and Ewon Comfortech

0.43

Correlation Coefficient

Woori Financial  Ewon Comfortech

Very weak diversification

The 3 months correlation between Woori and Ewon is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Ewon Comfortech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ewon Comfortech 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 Ewon Comfortech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ewon Comfortech has no effect on the direction of Woori Financial i.e., Woori Financial and Ewon Comfortech go up and down completely randomly.

Pair Corralation between Woori Financial and Ewon Comfortech

Assuming the 90 days trading horizon Woori Financial is expected to generate 2.81 times less return on investment than Ewon Comfortech. But when comparing it to its historical volatility, Woori Financial Group is 3.07 times less risky than Ewon Comfortech. It trades about 0.16 of its potential returns per unit of risk. Ewon Comfortech Co is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  106,300  in Ewon Comfortech Co on December 30, 2024 and sell it today you would earn a total of  37,000  from holding Ewon Comfortech Co or generate 34.81% return on investment over 90 days.

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

Woori Financial Group  vs.  Ewon Comfortech 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 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.

Ewon Comfortech

Risk-Adjusted Performance

Good

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

Pair Trading with Woori Financial and Ewon Comfortech

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

The idea behind Woori Financial Group and Ewon Comfortech 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.