Correlation Between Korea Refract and BNK Financial
Can any of the company-specific risk be diversified away by investing in both Korea Refract 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 Korea Refract and BNK Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Refract and BNK Financial Group, you can compare the effects of market volatilities on Korea Refract 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 Korea Refract with a short position of BNK Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Refract and BNK Financial.
Diversification Opportunities for Korea Refract and BNK Financial
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Korea and BNK is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Korea Refract 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 Korea Refract 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 Korea Refract 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 Korea Refract i.e., Korea Refract and BNK Financial go up and down completely randomly.
Pair Corralation between Korea Refract and BNK Financial
Assuming the 90 days trading horizon Korea Refract is expected to generate 0.95 times more return on investment than BNK Financial. However, Korea Refract is 1.05 times less risky than BNK Financial. It trades about -0.16 of its potential returns per unit of risk. BNK Financial Group is currently generating about -0.16 per unit of risk. If you would invest 220,000 in Korea Refract on November 27, 2024 and sell it today you would lose (7,000) from holding Korea Refract or give up 3.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Refract vs. BNK Financial Group
Performance |
| Timeline |
| Korea Refract |
| BNK Financial Group |
Korea Refract and BNK Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Refract and BNK Financial
The main advantage of trading using opposite Korea Refract and BNK Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Refract 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.| Korea Refract vs. Tae Kyung Chemical | Korea Refract vs. Korea Petro Chemical | Korea Refract vs. Infinitt Healthcare Co | Korea Refract vs. Kyeryong Construction Industrial |
| BNK Financial vs. Daol Investment Securities | BNK Financial vs. Stic Investments | BNK Financial vs. SBI Investment KOREA | BNK Financial vs. INFINITT Healthcare 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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