Correlation Between Woori Financial and Danske Bank
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Danske Bank 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 Danske Bank 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 Danske Bank AS, you can compare the effects of market volatilities on Woori Financial and Danske Bank 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 Danske Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Danske Bank.
Diversification Opportunities for Woori Financial and Danske Bank
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Woori and Danske is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Danske Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danske Bank AS 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 Danske Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danske Bank AS has no effect on the direction of Woori Financial i.e., Woori Financial and Danske Bank go up and down completely randomly.
Pair Corralation between Woori Financial and Danske Bank
Allowing for the 90-day total investment horizon Woori Financial Group is expected to generate 1.62 times more return on investment than Danske Bank. However, Woori Financial is 1.62 times more volatile than Danske Bank AS. It trades about 0.25 of its potential returns per unit of risk. Danske Bank AS is currently generating about 0.11 per unit of risk. If you would invest 3,767 in Woori Financial Group on May 7, 2025 and sell it today you would earn a total of 1,453 from holding Woori Financial Group or generate 38.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Woori Financial Group vs. Danske Bank AS
Performance |
Timeline |
Woori Financial Group |
Danske Bank AS |
Woori Financial and Danske Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Woori Financial and Danske Bank
The main advantage of trading using opposite Woori Financial and Danske Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Danske Bank 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 Danske Bank will offset losses from the drop in Danske Bank's long position.Woori Financial vs. Shinhan Financial Group | Woori Financial vs. KB Financial Group | Woori Financial vs. Banco De Chile | Woori Financial vs. Orix Corp Ads |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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