Correlation Between Woori Financial and Itau Unibanco
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Itau Unibanco 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 Itau Unibanco 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 Itau Unibanco Banco, you can compare the effects of market volatilities on Woori Financial and Itau Unibanco 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 Itau Unibanco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Itau Unibanco.
Diversification Opportunities for Woori Financial and Itau Unibanco
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Woori and Itau is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Itau Unibanco Banco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itau Unibanco Banco 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 Itau Unibanco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itau Unibanco Banco has no effect on the direction of Woori Financial i.e., Woori Financial and Itau Unibanco go up and down completely randomly.
Pair Corralation between Woori Financial and Itau Unibanco
Allowing for the 90-day total investment horizon Woori Financial Group is expected to generate 0.81 times more return on investment than Itau Unibanco. However, Woori Financial Group is 1.24 times less risky than Itau Unibanco. It trades about 0.3 of its potential returns per unit of risk. Itau Unibanco Banco is currently generating about 0.0 per unit of risk. If you would invest 3,234 in Woori Financial Group on November 30, 2024 and sell it today you would earn a total of 314.00 from holding Woori Financial Group or generate 9.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Woori Financial Group vs. Itau Unibanco Banco
Performance |
Timeline |
Woori Financial Group |
Itau Unibanco Banco |
Woori Financial and Itau Unibanco Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Woori Financial and Itau Unibanco
The main advantage of trading using opposite Woori Financial and Itau Unibanco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Itau Unibanco 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 Itau Unibanco will offset losses from the drop in Itau Unibanco's long position.Woori Financial vs. Shinhan Financial Group | ||
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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