Correlation Between Banco Bradesco and Woori Financial
Can any of the company-specific risk be diversified away by investing in both Banco Bradesco and Woori Financial 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 Banco Bradesco and Woori Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Bradesco SA and Woori Financial Group, you can compare the effects of market volatilities on Banco Bradesco and Woori Financial 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 Banco Bradesco with a short position of Woori Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bradesco and Woori Financial.
Diversification Opportunities for Banco Bradesco and Woori Financial
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Banco and Woori is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bradesco SA and Woori Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Financial Group and Banco Bradesco 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 Banco Bradesco SA are associated (or correlated) with Woori Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woori Financial Group has no effect on the direction of Banco Bradesco i.e., Banco Bradesco and Woori Financial go up and down completely randomly.
Pair Corralation between Banco Bradesco and Woori Financial
Given the investment horizon of 90 days Banco Bradesco SA is expected to under-perform the Woori Financial. But the stock apears to be less risky and, when comparing its historical volatility, Banco Bradesco SA is 1.17 times less risky than Woori Financial. The stock trades about -0.1 of its potential returns per unit of risk. The Woori Financial Group is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 3,623 in Woori Financial Group on August 25, 2024 and sell it today you would lose (44.00) from holding Woori Financial Group or give up 1.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Bradesco SA vs. Woori Financial Group
Performance |
| Timeline |
| Banco Bradesco SA |
| Woori Financial Group |
Banco Bradesco and Woori Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Bradesco and Woori Financial
The main advantage of trading using opposite Banco Bradesco and Woori Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Bradesco position performs unexpectedly, Woori Financial 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 Woori Financial will offset losses from the drop in Woori Financial's long position.| Banco Bradesco vs. Home Federal Bancorp | Banco Bradesco vs. LINKBANCORP | Banco Bradesco vs. Affinity Bancshares | Banco Bradesco vs. Southern California Bancorp |
| Woori Financial vs. Banco Santander Brasil | Woori Financial vs. CrossFirst Bankshares | Woori Financial vs. Banco Bradesco SA | Woori Financial vs. CF Bankshares |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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