Correlation Between SeAH Besteel and BNK Financial
Can any of the company-specific risk be diversified away by investing in both SeAH Besteel 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 SeAH Besteel and BNK Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SeAH Besteel Corp and BNK Financial Group, you can compare the effects of market volatilities on SeAH Besteel 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 SeAH Besteel with a short position of BNK Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SeAH Besteel and BNK Financial.
Diversification Opportunities for SeAH Besteel and BNK Financial
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SeAH and BNK is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding SeAH Besteel Corp 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 SeAH Besteel 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 SeAH Besteel Corp 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 SeAH Besteel i.e., SeAH Besteel and BNK Financial go up and down completely randomly.
Pair Corralation between SeAH Besteel and BNK Financial
Assuming the 90 days trading horizon SeAH Besteel Corp is expected to under-perform the BNK Financial. In addition to that, SeAH Besteel is 1.01 times more volatile than BNK Financial Group. It trades about -0.17 of its total potential returns per unit of risk. BNK Financial Group is currently generating about -0.11 per unit of volatility. If you would invest 1,083,000 in BNK Financial Group on October 11, 2024 and sell it today you would lose (40,000) from holding BNK Financial Group or give up 3.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SeAH Besteel Corp vs. BNK Financial Group
Performance |
| Timeline |
| SeAH Besteel Corp |
| BNK Financial Group |
SeAH Besteel and BNK Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SeAH Besteel and BNK Financial
The main advantage of trading using opposite SeAH Besteel and BNK Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SeAH Besteel 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.| SeAH Besteel vs. Hanjin Transportation Co | SeAH Besteel vs. Dongbang Transport Logistics | SeAH Besteel vs. Aprogen Healthcare Games | SeAH Besteel vs. Daishin Information Communications |
| BNK Financial vs. Atinum Investment Co | BNK Financial vs. Pureun Mutual Savings | BNK Financial vs. DSC Investment | BNK Financial vs. Cuckoo Homesys Co |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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