Correlation Between Woori Financial and Capital Bancorp
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Capital Bancorp 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 Capital Bancorp 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 Capital Bancorp, you can compare the effects of market volatilities on Woori Financial and Capital Bancorp 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 Capital Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Capital Bancorp.
Diversification Opportunities for Woori Financial and Capital Bancorp
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Woori and Capital is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Capital Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Bancorp 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 Capital Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Bancorp has no effect on the direction of Woori Financial i.e., Woori Financial and Capital Bancorp go up and down completely randomly.
Pair Corralation between Woori Financial and Capital Bancorp
Allowing for the 90-day total investment horizon Woori Financial is expected to generate 5.05 times less return on investment than Capital Bancorp. But when comparing it to its historical volatility, Woori Financial Group is 2.56 times less risky than Capital Bancorp. It trades about 0.1 of its potential returns per unit of risk. Capital Bancorp is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,502 in Capital Bancorp on August 30, 2024 and sell it today you would earn a total of 356.00 from holding Capital Bancorp or generate 14.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Woori Financial Group vs. Capital Bancorp
Performance |
| Timeline |
| Woori Financial Group |
| Capital Bancorp |
Woori Financial and Capital Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Capital Bancorp
The main advantage of trading using opposite Woori Financial and Capital Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Capital Bancorp 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 Capital Bancorp will offset losses from the drop in Capital Bancorp's long position.| Woori Financial vs. JPMorgan Chase Co | Woori Financial vs. Citigroup | Woori Financial vs. Wells Fargo | Woori Financial vs. Toronto Dominion Bank |
| Capital Bancorp vs. Community West Bancshares | Capital Bancorp vs. First Northwest Bancorp | Capital Bancorp vs. Home Federal Bancorp | Capital Bancorp vs. First Business Financial |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |