Correlation Between Woori Financial and City Holding
Can any of the company-specific risk be diversified away by investing in both Woori Financial and City Holding 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 City Holding 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 City Holding, you can compare the effects of market volatilities on Woori Financial and City Holding 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 City Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and City Holding.
Diversification Opportunities for Woori Financial and City Holding
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Woori and City is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and City Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Holding 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 City Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Holding has no effect on the direction of Woori Financial i.e., Woori Financial and City Holding go up and down completely randomly.
Pair Corralation between Woori Financial and City Holding
Allowing for the 90-day total investment horizon Woori Financial Group is expected to under-perform the City Holding. In addition to that, Woori Financial is 1.28 times more volatile than City Holding. It trades about -0.15 of its total potential returns per unit of risk. City Holding is currently generating about -0.12 per unit of volatility. If you would invest 11,461 in City Holding on January 9, 2025 and sell it today you would lose (418.00) from holding City Holding or give up 3.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Financial Group vs. City Holding
Performance |
| Timeline |
| Woori Financial Group |
| City Holding |
Woori Financial and City Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and City Holding
The main advantage of trading using opposite Woori Financial and City Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, City Holding 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 City Holding will offset losses from the drop in City Holding's long position.| Woori Financial vs. Axos Financial | Woori Financial vs. Byline Bancorp | Woori Financial vs. Nu Holdings | Woori Financial vs. Prosperity Bancshares |
| City Holding vs. Camden National | City Holding vs. Bank of Marin | City Holding vs. Arrow Financial | City Holding vs. Auburn National Bancorporation |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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