Correlation Between WOORI FIN and Universal Health

Can any of the company-specific risk be diversified away by investing in both WOORI FIN and Universal Health 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 FIN and Universal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between WOORI FIN GRP and Universal Health Services, you can compare the effects of market volatilities on WOORI FIN and Universal Health 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 FIN with a short position of Universal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of WOORI FIN and Universal Health.

Diversification Opportunities for WOORI FIN and Universal Health

-0.33

Correlation Coefficient

WOORI FIN  Universal Health

Very good diversification

The 3 months correlation between WOORI and Universal is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding WOORI FIN GRP and Universal Health Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Health Services and WOORI FIN 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 FIN GRP are associated (or correlated) with Universal Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Health Services has no effect on the direction of WOORI FIN i.e., WOORI FIN and Universal Health go up and down completely randomly.

Pair Corralation between WOORI FIN and Universal Health

Assuming the 90 days trading horizon WOORI FIN GRP is expected to generate 1.58 times more return on investment than Universal Health. However, WOORI FIN is 1.58 times more volatile than Universal Health Services. It trades about 0.2 of its potential returns per unit of risk. Universal Health Services is currently generating about 0.0 per unit of risk. If you would invest  2,984  in WOORI FIN GRP on April 24, 2025 and sell it today you would earn a total of  1,536  from holding WOORI FIN GRP or generate 51.47% return on investment over 90 days.

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

WOORI FIN GRP  vs.  Universal Health Services

WOORI FIN GRP

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WOORI FIN GRP are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, WOORI FIN reported solid returns over the last few months and may actually be approaching a breakup point.

Universal Health Services

Risk-Adjusted Performance

Very Weak

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

Pair Trading with WOORI FIN and Universal Health

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

The idea behind WOORI FIN GRP and Universal Health Services 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.