Correlation Between Woori Financial and Union Bankshares
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Union Bankshares 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 Union Bankshares 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 Union Bankshares, you can compare the effects of market volatilities on Woori Financial and Union Bankshares 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 Union Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Union Bankshares.
Diversification Opportunities for Woori Financial and Union Bankshares
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Union is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Union Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Bankshares 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 Union Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Bankshares has no effect on the direction of Woori Financial i.e., Woori Financial and Union Bankshares go up and down completely randomly.
Pair Corralation between Woori Financial and Union Bankshares
Allowing for the 90-day total investment horizon Woori Financial is expected to generate 3.59 times less return on investment than Union Bankshares. But when comparing it to its historical volatility, Woori Financial Group is 2.12 times less risky than Union Bankshares. It trades about 0.21 of its potential returns per unit of risk. Union Bankshares is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 2,910 in Union Bankshares on August 31, 2024 and sell it today you would earn a total of 562.00 from holding Union Bankshares or generate 19.31% 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. Union Bankshares
Performance |
| Timeline |
| Woori Financial Group |
| Union Bankshares |
Woori Financial and Union Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Union Bankshares
The main advantage of trading using opposite Woori Financial and Union Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Union Bankshares 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 Union Bankshares will offset losses from the drop in Union Bankshares' 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 |
| Union Bankshares vs. Home Bancorp | Union Bankshares vs. Rhinebeck Bancorp | Union Bankshares vs. LINKBANCORP | Union Bankshares vs. Magyar Bancorp |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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