Correlation Between Woori Financial and Unity Bancorp
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Unity Bancorp 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 Unity Bancorp 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 Unity Bancorp, you can compare the effects of market volatilities on Woori Financial and Unity Bancorp 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 Unity Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Unity Bancorp.
Diversification Opportunities for Woori Financial and Unity Bancorp
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Woori and Unity is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Unity Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unity Bancorp 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 Unity Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unity Bancorp has no effect on the direction of Woori Financial i.e., Woori Financial and Unity Bancorp go up and down completely randomly.
Pair Corralation between Woori Financial and Unity Bancorp
Allowing for the 90-day total investment horizon Woori Financial is expected to generate 1.27 times less return on investment than Unity Bancorp. But when comparing it to its historical volatility, Woori Financial Group is 1.17 times less risky than Unity Bancorp. It trades about 0.06 of its potential returns per unit of risk. Unity Bancorp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,706 in Unity Bancorp on August 24, 2024 and sell it today you would earn a total of 1,955 from holding Unity Bancorp or generate 72.25% 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. Unity Bancorp
Performance |
| Timeline |
| Woori Financial Group |
| Unity Bancorp |
Woori Financial and Unity Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Unity Bancorp
The main advantage of trading using opposite Woori Financial and Unity Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Unity Bancorp 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 Unity Bancorp will offset losses from the drop in Unity Bancorp's long position.| Woori Financial vs. Banco Bradesco SA | Woori Financial vs. Itau Unibanco Banco | Woori Financial vs. Banco Santander Brasil | Woori Financial vs. Western Alliance Bancorporation |
| Unity Bancorp vs. Affinity Bancshares | Unity Bancorp vs. Home Federal Bancorp | Unity Bancorp vs. Stellar Bancorp, | Unity Bancorp vs. Meridian Bank |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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