Correlation Between Prosperity Bancshares and Woori Financial
Can any of the company-specific risk be diversified away by investing in both Prosperity Bancshares 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 Prosperity Bancshares and Woori Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosperity Bancshares and Woori Financial Group, you can compare the effects of market volatilities on Prosperity Bancshares 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 Prosperity Bancshares with a short position of Woori Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosperity Bancshares and Woori Financial.
Diversification Opportunities for Prosperity Bancshares and Woori Financial
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Prosperity and Woori is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Prosperity Bancshares 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 Prosperity Bancshares 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 Prosperity Bancshares 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 Prosperity Bancshares i.e., Prosperity Bancshares and Woori Financial go up and down completely randomly.
Pair Corralation between Prosperity Bancshares and Woori Financial
Allowing for the 90-day total investment horizon Prosperity Bancshares is expected to generate 1.59 times less return on investment than Woori Financial. But when comparing it to its historical volatility, Prosperity Bancshares is 1.01 times less risky than Woori Financial. It trades about 0.04 of its potential returns per unit of risk. Woori Financial Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,371 in Woori Financial Group on August 30, 2024 and sell it today you would earn a total of 1,228 from holding Woori Financial Group or generate 51.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosperity Bancshares vs. Woori Financial Group
Performance |
| Timeline |
| Prosperity Bancshares |
| Woori Financial Group |
Prosperity Bancshares and Woori Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosperity Bancshares and Woori Financial
The main advantage of trading using opposite Prosperity Bancshares and Woori Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosperity Bancshares 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.| Prosperity Bancshares vs. Heartland Financial USA | Prosperity Bancshares vs. Heritage Commerce Corp | Prosperity Bancshares vs. Business First Bancshares | Prosperity Bancshares vs. German American Bancorp |
| Woori Financial vs. JPMorgan Chase Co | Woori Financial vs. Citigroup | Woori Financial vs. Wells Fargo | Woori Financial vs. Toronto Dominion Bank |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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