Correlation Between Woori Financial and Independent Bank
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Independent Bank 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 Independent Bank 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 Independent Bank Group, you can compare the effects of market volatilities on Woori Financial and Independent Bank 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 Independent Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Independent Bank.
Diversification Opportunities for Woori Financial and Independent Bank
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Independent is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Independent Bank Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Independent Bank 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 Independent Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Independent Bank has no effect on the direction of Woori Financial i.e., Woori Financial and Independent Bank go up and down completely randomly.
Pair Corralation between Woori Financial and Independent Bank
Allowing for the 90-day total investment horizon Woori Financial is expected to generate 2.65 times less return on investment than Independent Bank. But when comparing it to its historical volatility, Woori Financial Group is 3.29 times less risky than Independent Bank. It trades about 0.21 of its potential returns per unit of risk. Independent Bank Group is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 5,952 in Independent Bank Group on August 31, 2024 and sell it today you would earn a total of 774.00 from holding Independent Bank Group or generate 13.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Financial Group vs. Independent Bank Group
Performance |
| Timeline |
| Woori Financial Group |
| Independent Bank |
Woori Financial and Independent Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Independent Bank
The main advantage of trading using opposite Woori Financial and Independent Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Independent Bank 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 Independent Bank will offset losses from the drop in Independent Bank'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 |
| Independent Bank vs. Heritage Financial | Independent Bank vs. ConnectOne Bancorp | Independent Bank vs. Home Bancorp | Independent Bank vs. National Bank Holdings |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |