Correlation Between Woori Financial and NSTS Bancorp

Can any of the company-specific risk be diversified away by investing in both Woori Financial and NSTS Bancorp 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 NSTS Bancorp 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 NSTS Bancorp, you can compare the effects of market volatilities on Woori Financial and NSTS Bancorp 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 NSTS Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and NSTS Bancorp.

Diversification Opportunities for Woori Financial and NSTS Bancorp

-0.76

Correlation Coefficient

Woori Financial  NSTS Bancorp

Pay attention - limited upside

The 3 months correlation between Woori and NSTS is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and NSTS Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSTS Bancorp 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 NSTS Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSTS Bancorp has no effect on the direction of Woori Financial i.e., Woori Financial and NSTS Bancorp go up and down completely randomly.

Pair Corralation between Woori Financial and NSTS Bancorp

Allowing for the 90-day total investment horizon Woori Financial Group is expected to under-perform the NSTS Bancorp. In addition to that, Woori Financial is 1.04 times more volatile than NSTS Bancorp. It trades about -0.15 of its total potential returns per unit of risk. NSTS Bancorp is currently generating about 0.06 per unit of volatility. If you would invest  1,086  in NSTS Bancorp on October 15, 2024 and sell it today you would earn a total of  45.00  from holding NSTS Bancorp or generate 4.14% return on investment over 90 days.

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

Woori Financial Group  vs.  NSTS Bancorp

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 fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

NSTS Bancorp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in NSTS Bancorp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, NSTS Bancorp is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Woori Financial and NSTS Bancorp

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

The idea behind Woori Financial Group and NSTS Bancorp 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.