Correlation Between Woori Financial and Regions Financial
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Regions 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 Regions 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 Regions Financial, you can compare the effects of market volatilities on Woori Financial and Regions 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 Regions Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Regions Financial.
Diversification Opportunities for Woori Financial and Regions Financial
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Regions is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Regions Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial 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 Regions Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regions Financial has no effect on the direction of Woori Financial i.e., Woori Financial and Regions Financial go up and down completely randomly.
Pair Corralation between Woori Financial and Regions Financial
Allowing for the 90-day total investment horizon Woori Financial is expected to generate 1.32 times less return on investment than Regions Financial. But when comparing it to its historical volatility, Woori Financial Group is 1.1 times less risky than Regions Financial. It trades about 0.07 of its potential returns per unit of risk. Regions Financial is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,534 in Regions Financial on August 27, 2024 and sell it today you would earn a total of 1,194 from holding Regions Financial or generate 77.84% 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. Regions Financial
Performance |
| Timeline |
| Woori Financial Group |
| Regions Financial |
Woori Financial and Regions Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Regions Financial
The main advantage of trading using opposite Woori Financial and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Regions 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 Regions Financial will offset losses from the drop in Regions Financial'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 |
| Regions Financial vs. KeyCorp | Regions Financial vs. Fifth Third Bancorp | Regions Financial vs. Zions Bancorporation | Regions Financial vs. Huntington Bancshares Incorporated |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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