Correlation Between Hyundai and BNK Financial
Can any of the company-specific risk be diversified away by investing in both Hyundai 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 Hyundai and BNK Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor Co and BNK Financial Group, you can compare the effects of market volatilities on Hyundai 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 Hyundai with a short position of BNK Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and BNK Financial.
Diversification Opportunities for Hyundai and BNK Financial
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hyundai and BNK is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co 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 Hyundai 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 Hyundai Motor Co 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 Hyundai i.e., Hyundai and BNK Financial go up and down completely randomly.
Pair Corralation between Hyundai and BNK Financial
Assuming the 90 days trading horizon Hyundai Motor Co is expected to generate 1.16 times more return on investment than BNK Financial. However, Hyundai is 1.16 times more volatile than BNK Financial Group. It trades about 0.1 of its potential returns per unit of risk. BNK Financial Group is currently generating about 0.09 per unit of risk. If you would invest 6,624,509 in Hyundai Motor Co on September 24, 2024 and sell it today you would earn a total of 8,645,491 from holding Hyundai Motor Co or generate 130.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor Co vs. BNK Financial Group
Performance |
| Timeline |
| Hyundai Motor |
| BNK Financial Group |
Hyundai and BNK Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and BNK Financial
The main advantage of trading using opposite Hyundai and BNK Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai 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.| Hyundai vs. Puloon Technology | Hyundai vs. Dgb Financial | Hyundai vs. Shinhan Financial Group | Hyundai vs. Guyoung Technology Co |
| BNK Financial vs. KB Financial Group | BNK Financial vs. Shinhan Financial Group | BNK Financial vs. Hyundai Motor | BNK Financial vs. Hyundai Motor 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 Stocks Directory module to find actively traded stocks across global markets.
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