Correlation Between Jb Financial and Woori Technology

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

By analyzing existing cross correlation between Jb Financial and Woori Technology Investment, you can compare the effects of market volatilities on Jb Financial and Woori Technology 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 Jb Financial with a short position of Woori Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jb Financial and Woori Technology.

Diversification Opportunities for Jb Financial and Woori Technology

0.86

Correlation Coefficient

Jb Financial  Woori Technology

Very poor diversification

The 3 months correlation between 175330 and Woori is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Jb Financial and Woori Technology Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Technology Inv and Jb 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 Jb Financial are associated (or correlated) with Woori Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woori Technology Inv has no effect on the direction of Jb Financial i.e., Jb Financial and Woori Technology go up and down completely randomly.

Pair Corralation between Jb Financial and Woori Technology

Assuming the 90 days trading horizon Jb Financial is expected to generate 1.25 times less return on investment than Woori Technology. But when comparing it to its historical volatility, Jb Financial is 1.78 times less risky than Woori Technology. It trades about 0.23 of its potential returns per unit of risk. Woori Technology Investment is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  669,000  in Woori Technology Investment on September 4, 2024 and sell it today you would earn a total of  285,000  from holding Woori Technology Investment or generate 42.6% return on investment over 90 days.

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

Jb Financial  vs.  Woori Technology Investment

Jb Financial

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jb Financial are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jb Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Woori Technology Inv

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Woori Technology Investment are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Woori Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jb Financial and Woori Technology

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

The idea behind Jb Financial and Woori Technology Investment 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 Commodity Directory module to find actively traded commodities issued by global exchanges.