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 |
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
Performance |
Timeline |
Woori Financial Group |
Ewon Comfortech |
Woori Financial and Ewon Comfortech Volatility Contrast
Predicted Return Density |
Returns |
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.Woori Financial vs. YG Entertainment | Woori Financial vs. Kaonmedia Co | Woori Financial vs. Ssangyong Materials Corp | Woori Financial vs. INNOX Advanced Materials |
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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 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.
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