Correlation Between Woori Financial and T Rowe

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

Diversification Opportunities for Woori Financial and T Rowe

-0.31

Correlation Coefficient

Woori Financial  T Rowe

Very good diversification

The 3 months correlation between Woori and TROW is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and T Rowe Price in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Rowe Price 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 T Rowe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Rowe Price has no effect on the direction of Woori Financial i.e., Woori Financial and T Rowe go up and down completely randomly.

Pair Corralation between Woori Financial and T Rowe

Allowing for the 90-day total investment horizon Woori Financial is expected to generate 50.04 times less return on investment than T Rowe. In addition to that, Woori Financial is 1.22 times more volatile than T Rowe Price. It trades about 0.0 of its total potential returns per unit of risk. T Rowe Price is currently generating about 0.19 per unit of volatility. If you would invest  10,479  in T Rowe Price on August 30, 2024 and sell it today you would earn a total of  1,937  from holding T Rowe Price or generate 18.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Woori Financial Group  vs.  T Rowe Price

Woori Financial Group

Risk-Adjusted Performance

0 of 100

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.

T Rowe Price

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in T Rowe Price are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, T Rowe showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Woori Financial and T Rowe

The main advantage of trading using opposite Woori Financial and T Rowe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, T Rowe 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 T Rowe will offset losses from the drop in T Rowe's long position.

The idea behind Woori Financial Group and T Rowe Price 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..