Correlation Between Woori Financial and Westamerica Bancorporation
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Westamerica Bancorporation 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 Westamerica Bancorporation 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 Westamerica Bancorporation, you can compare the effects of market volatilities on Woori Financial and Westamerica Bancorporation 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 Westamerica Bancorporation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Westamerica Bancorporation.
Diversification Opportunities for Woori Financial and Westamerica Bancorporation
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Westamerica is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Westamerica Bancorp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westamerica Bancorporation 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 Westamerica Bancorporation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westamerica Bancorporation has no effect on the direction of Woori Financial i.e., Woori Financial and Westamerica Bancorporation go up and down completely randomly.
Pair Corralation between Woori Financial and Westamerica Bancorporation
Allowing for the 90-day total investment horizon Woori Financial Group is expected to generate 0.95 times more return on investment than Westamerica Bancorporation. However, Woori Financial Group is 1.05 times less risky than Westamerica Bancorporation. It trades about 0.06 of its potential returns per unit of risk. Westamerica Bancorporation is currently generating about 0.02 per unit of risk. If you would invest 2,371 in Woori Financial Group on August 30, 2024 and sell it today you would earn a total of 1,228 from holding Woori Financial Group or generate 51.79% 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. Westamerica Bancorp.
Performance |
| Timeline |
| Woori Financial Group |
| Westamerica Bancorporation |
Woori Financial and Westamerica Bancorporation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Westamerica Bancorporation
The main advantage of trading using opposite Woori Financial and Westamerica Bancorporation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Westamerica Bancorporation 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 Westamerica Bancorporation will offset losses from the drop in Westamerica Bancorporation's long position.| Woori Financial vs. JPMorgan Chase Co | Woori Financial vs. Citigroup | Woori Financial vs. Wells Fargo | Woori Financial vs. Toronto Dominion Bank |
| Westamerica Bancorporation vs. SVB T Corp | Westamerica Bancorporation vs. First Capital | Westamerica Bancorporation vs. Pioneer Bankcorp | Westamerica Bancorporation vs. Liberty Northwest 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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