Correlation Between Woori Financial and Banco Bradesco
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Banco Bradesco 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 Banco Bradesco 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 Banco Bradesco SA, you can compare the effects of market volatilities on Woori Financial and Banco Bradesco 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 Banco Bradesco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Banco Bradesco.
Diversification Opportunities for Woori Financial and Banco Bradesco
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Woori and Banco is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Banco Bradesco SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Bradesco SA 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 Banco Bradesco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Bradesco SA has no effect on the direction of Woori Financial i.e., Woori Financial and Banco Bradesco go up and down completely randomly.
Pair Corralation between Woori Financial and Banco Bradesco
Allowing for the 90-day total investment horizon Woori Financial Group is expected to generate 0.64 times more return on investment than Banco Bradesco. However, Woori Financial Group is 1.57 times less risky than Banco Bradesco. It trades about 0.06 of its potential returns per unit of risk. Banco Bradesco SA is currently generating about 0.01 per unit of risk. 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Financial Group vs. Banco Bradesco SA
Performance |
| Timeline |
| Woori Financial Group |
| Banco Bradesco SA |
Woori Financial and Banco Bradesco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Banco Bradesco
The main advantage of trading using opposite Woori Financial and Banco Bradesco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Banco Bradesco 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 Banco Bradesco will offset losses from the drop in Banco Bradesco's long position.| Woori Financial vs. JPMorgan Chase Co | Woori Financial vs. Citigroup | Woori Financial vs. Wells Fargo | Woori Financial vs. Toronto Dominion Bank |
| Banco Bradesco vs. Home Federal Bancorp | Banco Bradesco vs. LINKBANCORP | Banco Bradesco vs. Affinity Bancshares | Banco Bradesco vs. Southern California Bancorp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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