Correlation Between Samsung Electronics and BNK Financial
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics 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 Samsung Electronics and BNK Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Electronics Co and BNK Financial Group, you can compare the effects of market volatilities on Samsung Electronics 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 Samsung Electronics with a short position of BNK Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and BNK Financial.
Diversification Opportunities for Samsung Electronics and BNK Financial
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Samsung and BNK is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics 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 Samsung Electronics 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 Samsung Electronics 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 Samsung Electronics i.e., Samsung Electronics and BNK Financial go up and down completely randomly.
Pair Corralation between Samsung Electronics and BNK Financial
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the BNK Financial. In addition to that, Samsung Electronics is 1.87 times more volatile than BNK Financial Group. It trades about -0.07 of its total potential returns per unit of risk. BNK Financial Group is currently generating about 0.37 per unit of volatility. If you would invest 940,000 in BNK Financial Group on September 3, 2024 and sell it today you would earn a total of 116,000 from holding BNK Financial Group or generate 12.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. BNK Financial Group
Performance |
| Timeline |
| Samsung Electronics |
| BNK Financial Group |
Samsung Electronics and BNK Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and BNK Financial
The main advantage of trading using opposite Samsung Electronics and BNK Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics 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.| Samsung Electronics vs. Busan Industrial Co | Samsung Electronics vs. UNISEM Co | Samsung Electronics vs. RPBio Inc | Samsung Electronics vs. Finebesteel |
| BNK Financial vs. PI Advanced Materials | BNK Financial vs. SEOJEON ELECTRIC MACHINERY | BNK Financial vs. Top Material Co | BNK Financial vs. Phoenix Materials 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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