Correlation Between Woori Financial and United Security
Can any of the company-specific risk be diversified away by investing in both Woori Financial and United Security 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 United Security 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 United Security Bancshares, you can compare the effects of market volatilities on Woori Financial and United Security 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 United Security. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and United Security.
Diversification Opportunities for Woori Financial and United Security
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Woori and United is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and United Security Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Security Banc 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 United Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Security Banc has no effect on the direction of Woori Financial i.e., Woori Financial and United Security go up and down completely randomly.
Pair Corralation between Woori Financial and United Security
Allowing for the 90-day total investment horizon Woori Financial is expected to generate 1.52 times less return on investment than United Security. But when comparing it to its historical volatility, Woori Financial Group is 1.0 times less risky than United Security. It trades about 0.04 of its potential returns per unit of risk. United Security Bancshares is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 631.00 in United Security Bancshares on September 15, 2024 and sell it today you would earn a total of 399.00 from holding United Security Bancshares or generate 63.23% 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. United Security Bancshares
Performance |
Timeline |
Woori Financial Group |
United Security Banc |
Woori Financial and United Security Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Woori Financial and United Security
The main advantage of trading using opposite Woori Financial and United Security positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, United Security 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 United Security will offset losses from the drop in United Security'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 |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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