Correlation Between CAIXABANK UNADR and WOORI FIN

Can any of the company-specific risk be diversified away by investing in both CAIXABANK UNADR and WOORI FIN 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 CAIXABANK UNADR and WOORI FIN into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CAIXABANK UNADR 13 and WOORI FIN GRP, you can compare the effects of market volatilities on CAIXABANK UNADR and WOORI FIN 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 CAIXABANK UNADR with a short position of WOORI FIN. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAIXABANK UNADR and WOORI FIN.

Diversification Opportunities for CAIXABANK UNADR and WOORI FIN

-0.17

Correlation Coefficient

CAIXABANK UNADR  WOORI FIN

Good diversification

The 3 months correlation between CAIXABANK and WOORI is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding CAIXABANK UNADR 13 and WOORI FIN GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WOORI FIN GRP and CAIXABANK UNADR 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 CAIXABANK UNADR 13 are associated (or correlated) with WOORI FIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WOORI FIN GRP has no effect on the direction of CAIXABANK UNADR i.e., CAIXABANK UNADR and WOORI FIN go up and down completely randomly.

Pair Corralation between CAIXABANK UNADR and WOORI FIN

Assuming the 90 days trading horizon CAIXABANK UNADR is expected to generate 28.88 times less return on investment than WOORI FIN. But when comparing it to its historical volatility, CAIXABANK UNADR 13 is 1.84 times less risky than WOORI FIN. It trades about 0.0 of its potential returns per unit of risk. WOORI FIN GRP is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  3,081  in WOORI FIN GRP on September 4, 2024 and sell it today you would earn a total of  139.00  from holding WOORI FIN GRP or generate 4.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CAIXABANK UNADR 13  vs.  WOORI FIN GRP

CAIXABANK UNADR 13

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CAIXABANK UNADR 13 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CAIXABANK UNADR is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

WOORI FIN GRP

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in WOORI FIN GRP are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, WOORI FIN may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with CAIXABANK UNADR and WOORI FIN

The main advantage of trading using opposite CAIXABANK UNADR and WOORI FIN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAIXABANK UNADR position performs unexpectedly, WOORI FIN 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 WOORI FIN will offset losses from the drop in WOORI FIN's long position.

The idea behind CAIXABANK UNADR 13 and WOORI FIN GRP pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.