Correlation Between Woori Financial and KeyCorp

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

Diversification Opportunities for Woori Financial and KeyCorp

0.83

Correlation Coefficient

Woori Financial  KeyCorp

Very poor diversification

The 3 months correlation between Woori and KeyCorp is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp 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 KeyCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KeyCorp has no effect on the direction of Woori Financial i.e., Woori Financial and KeyCorp go up and down completely randomly.

Pair Corralation between Woori Financial and KeyCorp

Allowing for the 90-day total investment horizon Woori Financial Group is expected to generate 10.5 times more return on investment than KeyCorp. However, Woori Financial is 10.5 times more volatile than KeyCorp. It trades about 0.04 of its potential returns per unit of risk. KeyCorp is currently generating about 0.18 per unit of risk. If you would invest  5,055  in Woori Financial Group on May 5, 2025 and sell it today you would earn a total of  88.00  from holding Woori Financial Group or generate 1.74% 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.  KeyCorp

Woori Financial Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Woori Financial Group are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, Woori Financial reported solid returns over the last few months and may actually be approaching a breakup point.

KeyCorp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KeyCorp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, KeyCorp is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Woori Financial and KeyCorp

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

The idea behind Woori Financial Group and KeyCorp 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 Transaction History module to view history of all your transactions and understand their impact on performance.