Correlation Between Axos Financial and Woori Financial

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

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

Diversification Opportunities for Axos Financial and Woori Financial

0.45

Correlation Coefficient

Axos Financial  Woori Financial

Very weak diversification

The 3 months correlation between Axos and Woori is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial 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 Axos 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 Axos Financial 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 Axos Financial i.e., Axos Financial and Woori Financial go up and down completely randomly.

Pair Corralation between Axos Financial and Woori Financial

Allowing for the 90-day total investment horizon Axos Financial is expected to generate 1.45 times more return on investment than Woori Financial. However, Axos Financial is 1.45 times more volatile than Woori Financial Group. It trades about 0.03 of its potential returns per unit of risk. Woori Financial Group is currently generating about -0.05 per unit of risk. If you would invest  5,060  in Axos Financial on March 13, 2024 and sell it today you would earn a total of  133.00  from holding Axos Financial or generate 2.63% return on investment over 90 days.

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

Axos Financial  vs.  Woori Financial Group

Axos Financial

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Axos Financial are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Axos Financial is not utilizing all of its potentials. The current stock price disturbance, 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 nearly stable technical and fundamental indicators, Woori Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Axos Financial and Woori Financial

The main advantage of trading using opposite Axos Financial and Woori Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axos Financial 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 Axos Financial 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.