Correlation Between Woori Financial and Alkame Holdings

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

Diversification Opportunities for Woori Financial and Alkame Holdings

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Correlation Coefficient

Woori Financial  Alkame Holdings

Pay attention - limited upside

The 3 months correlation between Woori and Alkame is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Alkame Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alkame Holdings 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 Alkame Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alkame Holdings has no effect on the direction of Woori Financial i.e., Woori Financial and Alkame Holdings go up and down completely randomly.

Pair Corralation between Woori Financial and Alkame Holdings

Allowing for the 90-day total investment horizon Woori Financial Group is expected to generate 0.15 times more return on investment than Alkame Holdings. However, Woori Financial Group is 6.79 times less risky than Alkame Holdings. It trades about -0.03 of its potential returns per unit of risk. Alkame Holdings is currently generating about -0.12 per unit of risk. If you would invest  3,438  in Woori Financial Group on September 12, 2024 and sell it today you would lose (136.00) from holding Woori Financial Group or give up 3.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Woori Financial Group  vs.  Alkame Holdings

Woori Financial Group

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Woori Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Woori Financial is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Alkame Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alkame Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's forward-looking signals remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Woori Financial and Alkame Holdings

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

The idea behind Woori Financial Group and Alkame Holdings 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.