Correlation Between GEELY AUTOMOBILE and WOORI FIN

Can any of the company-specific risk be diversified away by investing in both GEELY AUTOMOBILE and WOORI FIN 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 GEELY AUTOMOBILE and WOORI FIN into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GEELY AUTOMOBILE and WOORI FIN GRP, you can compare the effects of market volatilities on GEELY AUTOMOBILE and WOORI FIN 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 GEELY AUTOMOBILE with a short position of WOORI FIN. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEELY AUTOMOBILE and WOORI FIN.

Diversification Opportunities for GEELY AUTOMOBILE and WOORI FIN

0.59

Correlation Coefficient

GEELY AUTOMOBILE  WOORI FIN

Very weak diversification

The 3 months correlation between GEELY and WOORI is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding GEELY AUTOMOBILE and WOORI FIN GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WOORI FIN GRP and GEELY AUTOMOBILE 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 GEELY AUTOMOBILE are associated (or correlated) with WOORI FIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WOORI FIN GRP has no effect on the direction of GEELY AUTOMOBILE i.e., GEELY AUTOMOBILE and WOORI FIN go up and down completely randomly.

Pair Corralation between GEELY AUTOMOBILE and WOORI FIN

Assuming the 90 days trading horizon GEELY AUTOMOBILE is expected to generate 1.73 times more return on investment than WOORI FIN. However, GEELY AUTOMOBILE is 1.73 times more volatile than WOORI FIN GRP. It trades about 0.07 of its potential returns per unit of risk. WOORI FIN GRP is currently generating about 0.02 per unit of risk. If you would invest  189.00  in GEELY AUTOMOBILE on December 20, 2024 and sell it today you would earn a total of  22.00  from holding GEELY AUTOMOBILE or generate 11.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

GEELY AUTOMOBILE  vs.  WOORI FIN GRP

GEELY AUTOMOBILE

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GEELY AUTOMOBILE are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, GEELY AUTOMOBILE unveiled solid returns over the last few months and may actually be approaching a breakup point.

WOORI FIN GRP

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in WOORI FIN GRP are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, WOORI FIN is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with GEELY AUTOMOBILE and WOORI FIN

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

The idea behind GEELY AUTOMOBILE and WOORI FIN GRP 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.