Correlation Between Woori Financial and Alfi

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

Diversification Opportunities for Woori Financial and Alfi

-0.64

Correlation Coefficient

Woori Financial  Alfi

Excellent diversification

The 3 months correlation between Woori and Alfi is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Alfi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfi Inc 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 Alfi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfi Inc has no effect on the direction of Woori Financial i.e., Woori Financial and Alfi go up and down completely randomly.

Pair Corralation between Woori Financial and Alfi

If you would invest  1.47  in Alfi Inc on January 30, 2024 and sell it today you would earn a total of  0.00  from holding Alfi Inc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

Woori Financial Group  vs.  Alfi Inc

Woori Financial Group

Risk-Adjusted Performance

6 of 100

Modest

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

Alfi Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Woori Financial and Alfi

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

The idea behind Woori Financial Group and Alfi Inc 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.