Correlation Between Jeju Bank and BNK Financial
Can any of the company-specific risk be diversified away by investing in both Jeju Bank 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 Jeju Bank and BNK Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeju Bank and BNK Financial Group, you can compare the effects of market volatilities on Jeju Bank 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 Jeju Bank with a short position of BNK Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Bank and BNK Financial.
Diversification Opportunities for Jeju Bank and BNK Financial
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jeju and BNK is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Bank 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 Jeju Bank 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 Jeju Bank 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 Jeju Bank i.e., Jeju Bank and BNK Financial go up and down completely randomly.
Pair Corralation between Jeju Bank and BNK Financial
Assuming the 90 days trading horizon Jeju Bank is expected to under-perform the BNK Financial. But the stock apears to be less risky and, when comparing its historical volatility, Jeju Bank is 1.29 times less risky than BNK Financial. The stock trades about -0.08 of its potential returns per unit of risk. The BNK Financial Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 854,240 in BNK Financial Group on September 4, 2024 and sell it today you would earn a total of 237,760 from holding BNK Financial Group or generate 27.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Bank vs. BNK Financial Group
Performance |
| Timeline |
| Jeju Bank |
| BNK Financial Group |
Jeju Bank and BNK Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Bank and BNK Financial
The main advantage of trading using opposite Jeju Bank and BNK Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Bank 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.| Jeju Bank vs. Wireless Power Amplifier | Jeju Bank vs. KG Eco Technology | Jeju Bank vs. Ilji Technology Co | Jeju Bank vs. Dong A Steel Technology |
| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |