Correlation Between Peoples Bancorp and Woori Financial

Can any of the company-specific risk be diversified away by investing in both Peoples Bancorp 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 Peoples Bancorp and Woori Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Peoples Bancorp and Woori Financial Group, you can compare the effects of market volatilities on Peoples Bancorp 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 Peoples Bancorp with a short position of Woori Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peoples Bancorp and Woori Financial.

Diversification Opportunities for Peoples Bancorp and Woori Financial

0.13

Correlation Coefficient

Peoples Bancorp  Woori Financial

Average diversification

The 3 months correlation between Peoples and Woori is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Peoples Bancorp 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 Peoples Bancorp 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 Peoples Bancorp 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 Peoples Bancorp i.e., Peoples Bancorp and Woori Financial go up and down completely randomly.

Pair Corralation between Peoples Bancorp and Woori Financial

Given the investment horizon of 90 days Peoples Bancorp is expected to under-perform the Woori Financial. In addition to that, Peoples Bancorp is 1.1 times more volatile than Woori Financial Group. It trades about 0.0 of its total potential returns per unit of risk. Woori Financial Group is currently generating about 0.0 per unit of volatility. If you would invest  3,278  in Woori Financial Group on October 20, 2024 and sell it today you would lose (65.00) from holding Woori Financial Group or give up 1.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.21%
Values	Daily Returns

Peoples Bancorp  vs.  Woori Financial Group

Peoples Bancorp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Peoples Bancorp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, Peoples Bancorp is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Woori Financial Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Woori Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Peoples Bancorp and Woori Financial

The main advantage of trading using opposite Peoples Bancorp and Woori Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peoples Bancorp 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.

The idea behind Peoples Bancorp and Woori Financial Group 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.

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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.