Correlation Between Woori Financial and Western Alliance
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Western Alliance 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 Western Alliance 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 Western Alliance Bancorporation, you can compare the effects of market volatilities on Woori Financial and Western Alliance 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 Western Alliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Western Alliance.
Diversification Opportunities for Woori Financial and Western Alliance
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Western is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Western Alliance Bancorp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Alliance Ban 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 Western Alliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Alliance Ban has no effect on the direction of Woori Financial i.e., Woori Financial and Western Alliance go up and down completely randomly.
Pair Corralation between Woori Financial and Western Alliance
Allowing for the 90-day total investment horizon Woori Financial Group is expected to under-perform the Western Alliance. In addition to that, Woori Financial is 1.42 times more volatile than Western Alliance Bancorporation. It trades about -0.06 of its total potential returns per unit of risk. Western Alliance Bancorporation is currently generating about 0.19 per unit of volatility. If you would invest 2,039 in Western Alliance Bancorporation on August 26, 2024 and sell it today you would earn a total of 105.00 from holding Western Alliance Bancorporation or generate 5.15% 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. Western Alliance Bancorp.
Performance |
| Timeline |
| Woori Financial Group |
| Western Alliance Ban |
Woori Financial and Western Alliance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Western Alliance
The main advantage of trading using opposite Woori Financial and Western Alliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Western Alliance 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 Western Alliance will offset losses from the drop in Western Alliance'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 |
| Western Alliance vs. Morgan Stanley | Western Alliance vs. KeyCorp | Western Alliance vs. KeyCorp | Western Alliance vs. KeyCorp |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |