Correlation Between Iljin Display and BNK Financial
Can any of the company-specific risk be diversified away by investing in both Iljin Display 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 Iljin Display and BNK Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iljin Display and BNK Financial Group, you can compare the effects of market volatilities on Iljin Display 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 Iljin Display with a short position of BNK Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iljin Display and BNK Financial.
Diversification Opportunities for Iljin Display and BNK Financial
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Iljin and BNK is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Iljin Display 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 Iljin Display 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 Iljin Display 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 Iljin Display i.e., Iljin Display and BNK Financial go up and down completely randomly.
Pair Corralation between Iljin Display and BNK Financial
Assuming the 90 days trading horizon Iljin Display is expected to under-perform the BNK Financial. In addition to that, Iljin Display is 1.97 times more volatile than BNK Financial Group. It trades about -0.02 of its total potential returns per unit of risk. BNK Financial Group is currently generating about 0.09 per unit of volatility. If you would invest 614,089 in BNK Financial Group on August 27, 2024 and sell it today you would earn a total of 381,911 from holding BNK Financial Group or generate 62.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iljin Display vs. BNK Financial Group
Performance |
| Timeline |
| Iljin Display |
| BNK Financial Group |
Iljin Display and BNK Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iljin Display and BNK Financial
The main advantage of trading using opposite Iljin Display and BNK Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iljin Display 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.| Iljin Display vs. EBEST Investment Securities | Iljin Display vs. E Investment Development | Iljin Display vs. Dongkuk Steel Mill | Iljin Display vs. Stic Investments |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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