Correlation Between Woori Financial and Live Current

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

Diversification Opportunities for Woori Financial and Live Current

-0.35

Correlation Coefficient

Woori Financial  Live Current

Very good diversification

The 3 months correlation between Woori and Live is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Live Current Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Current Media 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 Live Current. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Current Media has no effect on the direction of Woori Financial i.e., Woori Financial and Live Current go up and down completely randomly.

Pair Corralation between Woori Financial and Live Current

If you would invest  3,147  in Woori Financial Group on February 6, 2024 and sell it today you would earn a total of  26.00  from holding Woori Financial Group or generate 0.83% return on investment over 90 days.

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

Woori Financial Group  vs.  Live Current Media

Woori Financial Group

Risk-Adjusted Performance

6 of 100

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 weak technical and fundamental indicators, Woori Financial may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Live Current Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Live Current Media has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in June 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Woori Financial and Live Current

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

The idea behind Woori Financial Group and Live Current Media 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.

Check out your portfolio center.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.