Correlation Between Woori Financial and CNB Financial
Can any of the company-specific risk be diversified away by investing in both Woori Financial and CNB 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 Woori Financial and CNB Financial 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 CNB Financial, you can compare the effects of market volatilities on Woori Financial and CNB 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 Woori Financial with a short position of CNB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and CNB Financial.
Diversification Opportunities for Woori Financial and CNB Financial
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Woori and CNB is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and CNB Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNB Financial 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 CNB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNB Financial has no effect on the direction of Woori Financial i.e., Woori Financial and CNB Financial go up and down completely randomly.
Pair Corralation between Woori Financial and CNB Financial
Allowing for the 90-day total investment horizon Woori Financial is expected to generate 33.4 times less return on investment than CNB Financial. But when comparing it to its historical volatility, Woori Financial Group is 1.86 times less risky than CNB Financial. It trades about 0.01 of its potential returns per unit of risk. CNB Financial is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,547 in CNB Financial on August 24, 2024 and sell it today you would earn a total of 211.00 from holding CNB Financial or generate 8.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Financial Group vs. CNB Financial
Performance |
| Timeline |
| Woori Financial Group |
| CNB Financial |
Woori Financial and CNB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and CNB Financial
The main advantage of trading using opposite Woori Financial and CNB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, CNB 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 CNB Financial will offset losses from the drop in CNB Financial'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 |
| CNB Financial vs. Waterstone Financial | CNB Financial vs. Mid Penn Bancorp | CNB Financial vs. ST Bancorp | CNB Financial vs. Republic 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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