Correlation Between Woori Financial and Carter Bank
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Carter Bank 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 Carter Bank 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 Carter Bank and, you can compare the effects of market volatilities on Woori Financial and Carter Bank 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 Carter Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Carter Bank.
Diversification Opportunities for Woori Financial and Carter Bank
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Carter is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Carter Bank and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carter Bank 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 Carter Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carter Bank has no effect on the direction of Woori Financial i.e., Woori Financial and Carter Bank go up and down completely randomly.
Pair Corralation between Woori Financial and Carter Bank
Allowing for the 90-day total investment horizon Woori Financial is expected to generate 25.23 times less return on investment than Carter Bank. But when comparing it to its historical volatility, Woori Financial Group is 1.1 times less risky than Carter Bank. It trades about 0.0 of its potential returns per unit of risk. Carter Bank and is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,730 in Carter Bank and on August 30, 2024 and sell it today you would earn a total of 141.00 from holding Carter Bank and or generate 8.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Financial Group vs. Carter Bank and
Performance |
| Timeline |
| Woori Financial Group |
| Carter Bank |
Woori Financial and Carter Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Carter Bank
The main advantage of trading using opposite Woori Financial and Carter Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Carter Bank 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 Carter Bank will offset losses from the drop in Carter Bank's long position.| Woori Financial vs. Shinhan Financial Group | Woori Financial vs. KB Financial Group | Woori Financial vs. Banco De Chile | Woori Financial vs. Orix Corp Ads |
| Carter Bank vs. Home Bancorp | Carter Bank vs. Community West Bancshares | Carter Bank vs. First Community | Carter Bank vs. Great Southern 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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