Correlation Between CF Bankshares and Woori Financial
Can any of the company-specific risk be diversified away by investing in both CF Bankshares and Woori Financial 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 CF Bankshares and Woori Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CF Bankshares and Woori Financial Group, you can compare the effects of market volatilities on CF Bankshares and Woori Financial 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 CF Bankshares with a short position of Woori Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Bankshares and Woori Financial.
Diversification Opportunities for CF Bankshares and Woori Financial
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CFBK and Woori is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding CF Bankshares and Woori Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Financial Group and CF Bankshares 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 CF Bankshares are associated (or correlated) with Woori Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woori Financial Group has no effect on the direction of CF Bankshares i.e., CF Bankshares and Woori Financial go up and down completely randomly.
Pair Corralation between CF Bankshares and Woori Financial
Given the investment horizon of 90 days CF Bankshares is expected to generate 2.53 times more return on investment than Woori Financial. However, CF Bankshares is 2.53 times more volatile than Woori Financial Group. It trades about 0.21 of its potential returns per unit of risk. Woori Financial Group is currently generating about 0.28 per unit of risk. If you would invest 2,538 in CF Bankshares on September 1, 2024 and sell it today you would earn a total of 284.00 from holding CF Bankshares or generate 11.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CF Bankshares vs. Woori Financial Group
Performance |
Timeline |
CF Bankshares |
Woori Financial Group |
CF Bankshares and Woori Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CF Bankshares and Woori Financial
The main advantage of trading using opposite CF Bankshares and Woori Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Bankshares position performs unexpectedly, Woori Financial 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 Financial will offset losses from the drop in Woori Financial's long position.CF Bankshares vs. Affinity Bancshares | CF Bankshares vs. Southern California Bancorp | CF Bankshares vs. Auburn National Bancorporation | CF Bankshares vs. BayCom Corp |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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