Correlation Between NVIDIA and WOORI FIN

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

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

Diversification Opportunities for NVIDIA and WOORI FIN

0.06

Correlation Coefficient

NVIDIA  WOORI FIN

Significant diversification

The 3 months correlation between NVIDIA and WOORI is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA 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 NVIDIA 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 NVIDIA 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 NVIDIA i.e., NVIDIA and WOORI FIN go up and down completely randomly.

Pair Corralation between NVIDIA and WOORI FIN

Given the investment horizon of 90 days NVIDIA is expected to generate 0.86 times more return on investment than WOORI FIN. However, NVIDIA is 1.16 times less risky than WOORI FIN. It trades about 0.15 of its potential returns per unit of risk. WOORI FIN GRP is currently generating about 0.03 per unit of risk. If you would invest  1,769  in NVIDIA on October 5, 2024 and sell it today you would earn a total of  12,062  from holding NVIDIA or generate 681.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.18%
Values	Daily Returns

NVIDIA  vs.  WOORI FIN GRP

NVIDIA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NVIDIA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental indicators, NVIDIA may actually be approaching a critical reversion point that can send shares even higher in February 2025.

WOORI FIN GRP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WOORI FIN GRP has generated negative risk-adjusted returns adding no value to investors with long positions. 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 NVIDIA and WOORI FIN

The main advantage of trading using opposite NVIDIA and WOORI FIN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA 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 NVIDIA 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.