Correlation Between Woori Financial and ESSA Bancorp
Can any of the company-specific risk be diversified away by investing in both Woori Financial and ESSA 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 ESSA 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 ESSA Bancorp, you can compare the effects of market volatilities on Woori Financial and ESSA 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 ESSA Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and ESSA Bancorp.
Diversification Opportunities for Woori Financial and ESSA Bancorp
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and ESSA is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and ESSA Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESSA 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 ESSA Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESSA Bancorp has no effect on the direction of Woori Financial i.e., Woori Financial and ESSA Bancorp go up and down completely randomly.
Pair Corralation between Woori Financial and ESSA Bancorp
Allowing for the 90-day total investment horizon Woori Financial Group is expected to generate 0.78 times more return on investment than ESSA Bancorp. However, Woori Financial Group is 1.27 times less risky than ESSA Bancorp. It trades about 0.06 of its potential returns per unit of risk. ESSA Bancorp is currently generating about 0.01 per unit of risk. If you would invest 2,355 in Woori Financial Group on August 23, 2024 and sell it today you would earn a total of 1,189 from holding Woori Financial Group or generate 50.49% 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. ESSA Bancorp
Performance |
| Timeline |
| Woori Financial Group |
| ESSA Bancorp |
Woori Financial and ESSA Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and ESSA Bancorp
The main advantage of trading using opposite Woori Financial and ESSA Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, ESSA 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 ESSA Bancorp will offset losses from the drop in ESSA Bancorp'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 |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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