Correlation Between Korea Information and BNK Financial
Can any of the company-specific risk be diversified away by investing in both Korea Information 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 Information 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 Information Engineering and BNK Financial Group, you can compare the effects of market volatilities on Korea Information 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 Information with a short position of BNK Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Information and BNK Financial.
Diversification Opportunities for Korea Information and BNK Financial
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and BNK is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Korea Information Engineering 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 Information 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 Information Engineering 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 Information i.e., Korea Information and BNK Financial go up and down completely randomly.
Pair Corralation between Korea Information and BNK Financial
Assuming the 90 days trading horizon Korea Information Engineering is expected to generate 1.21 times more return on investment than BNK Financial. However, Korea Information is 1.21 times more volatile than BNK Financial Group. It trades about 0.08 of its potential returns per unit of risk. BNK Financial Group is currently generating about 0.06 per unit of risk. If you would invest 240,500 in Korea Information Engineering on September 24, 2024 and sell it today you would earn a total of 10,500 from holding Korea Information Engineering or generate 4.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Information Engineering vs. BNK Financial Group
Performance |
| Timeline |
| Korea Information |
| BNK Financial Group |
Korea Information and BNK Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Information and BNK Financial
The main advantage of trading using opposite Korea Information and BNK Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Information 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 Information vs. Dongsin Engineering Construction | Korea Information vs. Doosan Fuel Cell | Korea Information vs. Daishin Balance 1 | Korea Information vs. Total Soft Bank |
| BNK Financial vs. KB Financial Group | BNK Financial vs. Shinhan Financial Group | BNK Financial vs. Hyundai Motor | BNK Financial vs. Hyundai Motor 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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