Correlation Between Woori Financial and Heartland Financial
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Heartland 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 Heartland 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 Heartland Financial USA, you can compare the effects of market volatilities on Woori Financial and Heartland 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 Heartland Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Heartland Financial.
Diversification Opportunities for Woori Financial and Heartland Financial
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Heartland is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Heartland Financial USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heartland Financial USA 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 Heartland Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heartland Financial USA has no effect on the direction of Woori Financial i.e., Woori Financial and Heartland Financial go up and down completely randomly.
Pair Corralation between Woori Financial and Heartland Financial
Allowing for the 90-day total investment horizon Woori Financial Group is expected to generate 2.63 times more return on investment than Heartland Financial. However, Woori Financial is 2.63 times more volatile than Heartland Financial USA. It trades about 0.07 of its potential returns per unit of risk. Heartland Financial USA is currently generating about 0.08 per unit of risk. If you would invest 2,710 in Woori Financial Group on August 24, 2024 and sell it today you would earn a total of 885.00 from holding Woori Financial Group or generate 32.66% 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. Heartland Financial USA
Performance |
| Timeline |
| Woori Financial Group |
| Heartland Financial USA |
Woori Financial and Heartland Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Heartland Financial
The main advantage of trading using opposite Woori Financial and Heartland Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Heartland 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 Heartland Financial will offset losses from the drop in Heartland Financial's long position.| Woori Financial vs. Banco Bradesco SA | Woori Financial vs. Itau Unibanco Banco | Woori Financial vs. Banco Santander Brasil | Woori Financial vs. Western Alliance Bancorporation |
| Heartland Financial vs. Capital One Financial | Heartland Financial vs. Capital One Financial | Heartland Financial vs. Bank of America | Heartland Financial vs. KeyCorp |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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