Correlation Between Sejong Telecom and BNK Financial
Can any of the company-specific risk be diversified away by investing in both Sejong Telecom 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 Sejong Telecom and BNK Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sejong Telecom and BNK Financial Group, you can compare the effects of market volatilities on Sejong Telecom 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 Sejong Telecom with a short position of BNK Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sejong Telecom and BNK Financial.
Diversification Opportunities for Sejong Telecom and BNK Financial
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sejong and BNK is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sejong Telecom 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 Sejong Telecom 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 Sejong Telecom 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 Sejong Telecom i.e., Sejong Telecom and BNK Financial go up and down completely randomly.
Pair Corralation between Sejong Telecom and BNK Financial
Assuming the 90 days trading horizon Sejong Telecom is expected to generate 0.6 times more return on investment than BNK Financial. However, Sejong Telecom is 1.65 times less risky than BNK Financial. It trades about 0.29 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 41,400 in Sejong Telecom on November 27, 2024 and sell it today you would earn a total of 1,500 from holding Sejong Telecom or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sejong Telecom vs. BNK Financial Group
Performance |
| Timeline |
| Sejong Telecom |
| BNK Financial Group |
Sejong Telecom and BNK Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sejong Telecom and BNK Financial
The main advantage of trading using opposite Sejong Telecom and BNK Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sejong Telecom 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.| Sejong Telecom vs. Sam Chun Dang | Sejong Telecom vs. SAMRYOONG CoLtd | Sejong Telecom vs. BYON Co | Sejong Telecom vs. Sangsangin Co |
| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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