Correlation Between Bohae Brewery and BNK Financial
Can any of the company-specific risk be diversified away by investing in both Bohae Brewery and BNK 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 Bohae Brewery and BNK Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bohae Brewery and BNK Financial Group, you can compare the effects of market volatilities on Bohae Brewery and BNK 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 Bohae Brewery with a short position of BNK Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bohae Brewery and BNK Financial.
Diversification Opportunities for Bohae Brewery and BNK Financial
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bohae and BNK is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Bohae Brewery and BNK Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNK Financial Group and Bohae Brewery 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 Bohae Brewery are associated (or correlated) with BNK Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNK Financial Group has no effect on the direction of Bohae Brewery i.e., Bohae Brewery and BNK Financial go up and down completely randomly.
Pair Corralation between Bohae Brewery and BNK Financial
Assuming the 90 days trading horizon Bohae Brewery is expected to under-perform the BNK Financial. In addition to that, Bohae Brewery is 1.38 times more volatile than BNK Financial Group. It trades about -0.03 of its total potential returns per unit of risk. BNK Financial Group is currently generating about 0.14 per unit of volatility. If you would invest 659,528 in BNK Financial Group on September 4, 2024 and sell it today you would earn a total of 528,472 from holding BNK Financial Group or generate 80.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bohae Brewery vs. BNK Financial Group
Performance |
| Timeline |
| Bohae Brewery |
| BNK Financial Group |
Bohae Brewery and BNK Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bohae Brewery and BNK Financial
The main advantage of trading using opposite Bohae Brewery and BNK Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bohae Brewery position performs unexpectedly, BNK 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 BNK Financial will offset losses from the drop in BNK Financial's long position.| Bohae Brewery vs. LG Display | Bohae Brewery vs. Hyundai Motor | Bohae Brewery vs. Hyundai Motor Co | Bohae Brewery vs. Hyundai Motor Co |
| BNK Financial vs. Dongjin Semichem Co | BNK Financial vs. AhnLab Inc | BNK Financial vs. Posco ICT | BNK Financial vs. CJ ENM |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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