Correlation Between Woori Financial and First Horizon
Can any of the company-specific risk be diversified away by investing in both Woori Financial and First Horizon 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 First Horizon 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 First Horizon National, you can compare the effects of market volatilities on Woori Financial and First Horizon 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 First Horizon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and First Horizon.
Diversification Opportunities for Woori Financial and First Horizon
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and First is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and First Horizon National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Horizon National 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 First Horizon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Horizon National has no effect on the direction of Woori Financial i.e., Woori Financial and First Horizon go up and down completely randomly.
Pair Corralation between Woori Financial and First Horizon
Allowing for the 90-day total investment horizon Woori Financial is expected to generate 5.53 times less return on investment than First Horizon. But when comparing it to its historical volatility, Woori Financial Group is 3.18 times less risky than First Horizon. It trades about 0.16 of its potential returns per unit of risk. First Horizon National is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,738 in First Horizon National on August 28, 2024 and sell it today you would earn a total of 404.00 from holding First Horizon National or generate 23.25% 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. First Horizon National
Performance |
| Timeline |
| Woori Financial Group |
| First Horizon National |
Woori Financial and First Horizon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and First Horizon
The main advantage of trading using opposite Woori Financial and First Horizon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, First Horizon 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 First Horizon will offset losses from the drop in First Horizon's long position.| Woori Financial vs. Banco Santander Brasil | Woori Financial vs. CrossFirst Bankshares | Woori Financial vs. Banco Bradesco SA | Woori Financial vs. CF Bankshares |
| First Horizon vs. Zions Bancorporation | First Horizon vs. KeyCorp | First Horizon vs. Comerica | First Horizon vs. Western Alliance 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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