Correlation Between Woori Financial and Bank of Marin

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

Diversification Opportunities for Woori Financial and Bank of Marin

-0.52
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Woori and Bank is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Bank of Marin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Marin 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 Bank of Marin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Marin has no effect on the direction of Woori Financial i.e., Woori Financial and Bank of Marin go up and down completely randomly.

Pair Corralation between Woori Financial and Bank of Marin

Allowing for the 90-day total investment horizon Woori Financial Group is expected to generate 0.66 times more return on investment than Bank of Marin. However, Woori Financial Group is 1.52 times less risky than Bank of Marin. It trades about 0.06 of its potential returns per unit of risk. Bank of Marin is currently generating about 0.0 per unit of risk. If you would invest  2,331  in Woori Financial Group on August 24, 2024 and sell it today you would earn a total of  1,264  from holding Woori Financial Group or generate 54.23% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Woori Financial Group  vs.  Bank of Marin

 Performance 
       Timeline  
Woori Financial Group 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Woori Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Woori Financial is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.
Bank of Marin 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Bank of Marin are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Bank of Marin exhibited solid returns over the last few months and may actually be approaching a breakup point.

Woori Financial and Bank of Marin Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Woori Financial and Bank of Marin

The main advantage of trading using opposite Woori Financial and Bank of Marin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Bank of Marin 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 Bank of Marin will offset losses from the drop in Bank of Marin's long position.
The idea behind Woori Financial Group and Bank of Marin 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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