Correlation Between Woori Financial and Bank Ozk
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Bank Ozk 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 Bank Ozk 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 Bank Ozk, you can compare the effects of market volatilities on Woori Financial and Bank Ozk 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 Bank Ozk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Bank Ozk.
Diversification Opportunities for Woori Financial and Bank Ozk
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Bank is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Bank Ozk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Ozk 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 Bank Ozk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Ozk has no effect on the direction of Woori Financial i.e., Woori Financial and Bank Ozk go up and down completely randomly.
Pair Corralation between Woori Financial and Bank Ozk
Allowing for the 90-day total investment horizon Woori Financial Group is expected to generate 0.8 times more return on investment than Bank Ozk. However, Woori Financial Group is 1.25 times less risky than Bank Ozk. It trades about 0.07 of its potential returns per unit of risk. Bank Ozk is currently generating about 0.05 per unit of risk. If you would invest 2,686 in Woori Financial Group on August 25, 2024 and sell it today you would earn a total of 893.00 from holding Woori Financial Group or generate 33.25% 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. Bank Ozk
Performance |
| Timeline |
| Woori Financial Group |
| Bank Ozk |
Woori Financial and Bank Ozk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Bank Ozk
The main advantage of trading using opposite Woori Financial and Bank Ozk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Bank Ozk 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 Bank Ozk will offset losses from the drop in Bank Ozk'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 |
| Bank Ozk vs. International Bancshares | Bank Ozk vs. Hilltop Holdings | Bank Ozk vs. FB Financial Corp | Bank Ozk vs. Red River Bancshares |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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