Correlation Between Woori Financial and First Horizon
Can any of the company-specific risk be diversified away by investing in both Woori Financial and First Horizon 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 First Horizon 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 First Horizon, you can compare the effects of market volatilities on Woori Financial and First Horizon 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 First Horizon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and First Horizon.
Diversification Opportunities for Woori Financial and First Horizon
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Woori and First is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and First Horizon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Horizon 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 First Horizon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Horizon has no effect on the direction of Woori Financial i.e., Woori Financial and First Horizon go up and down completely randomly.
Pair Corralation between Woori Financial and First Horizon
Allowing for the 90-day total investment horizon Woori Financial Group is expected to generate 3.53 times more return on investment than First Horizon. However, Woori Financial is 3.53 times more volatile than First Horizon. It trades about 0.09 of its potential returns per unit of risk. First Horizon is currently generating about 0.04 per unit of risk. If you would invest 3,190 in Woori Financial Group on December 18, 2024 and sell it today you would earn a total of 220.00 from holding Woori Financial Group or generate 6.9% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Woori Financial Group vs. First Horizon
Performance |
Timeline |
Woori Financial Group |
First Horizon |
Woori Financial and First Horizon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Woori Financial and First Horizon
The main advantage of trading using opposite Woori Financial and First Horizon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, First Horizon 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 First Horizon will offset losses from the drop in First Horizon's long position.Woori Financial vs. JPMorgan Chase Co | Woori Financial vs. Citigroup | Woori Financial vs. Wells Fargo | Woori Financial vs. Toronto Dominion Bank |
First Horizon vs. First Horizon | First Horizon vs. First Horizon | First Horizon vs. First Horizon | First Horizon vs. Customers Bancorp |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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