Correlation Between Woori Financial and Exmar NV

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

Diversification Opportunities for Woori Financial and Exmar NV

0.29

Correlation Coefficient

Woori Financial  Exmar NV

Modest diversification

The 3 months correlation between Woori and Exmar is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Exmar NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exmar NV 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 Exmar NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exmar NV has no effect on the direction of Woori Financial i.e., Woori Financial and Exmar NV go up and down completely randomly.

Pair Corralation between Woori Financial and Exmar NV

Allowing for the 90-day total investment horizon Woori Financial is expected to generate 7.77 times less return on investment than Exmar NV. But when comparing it to its historical volatility, Woori Financial Group is 5.02 times less risky than Exmar NV. It trades about 0.09 of its potential returns per unit of risk. Exmar NV is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  765.00  in Exmar NV on December 18, 2024 and sell it today you would earn a total of  438.00  from holding Exmar NV or generate 57.25% return on investment over 90 days.

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

Woori Financial Group  vs.  Exmar NV

Woori Financial Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Woori Financial Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, Woori Financial may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Exmar NV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Exmar NV are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Exmar NV reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Woori Financial and Exmar NV

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

The idea behind Woori Financial Group and Exmar NV 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.