Correlation Between Phoenix Materials and BNK Financial
Can any of the company-specific risk be diversified away by investing in both Phoenix Materials 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 Phoenix Materials and BNK Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phoenix Materials Co and BNK Financial Group, you can compare the effects of market volatilities on Phoenix Materials 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 Phoenix Materials with a short position of BNK Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phoenix Materials and BNK Financial.
Diversification Opportunities for Phoenix Materials and BNK Financial
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Phoenix and BNK is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Phoenix Materials Co 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 Phoenix Materials 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 Phoenix Materials Co 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 Phoenix Materials i.e., Phoenix Materials and BNK Financial go up and down completely randomly.
Pair Corralation between Phoenix Materials and BNK Financial
Assuming the 90 days trading horizon Phoenix Materials Co is expected to under-perform the BNK Financial. In addition to that, Phoenix Materials is 2.78 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 0.12 per unit of volatility. If you would invest 649,324 in BNK Financial Group on September 4, 2024 and sell it today you would earn a total of 442,676 from holding BNK Financial Group or generate 68.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phoenix Materials Co vs. BNK Financial Group
Performance |
| Timeline |
| Phoenix Materials |
| BNK Financial Group |
Phoenix Materials and BNK Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phoenix Materials and BNK Financial
The main advantage of trading using opposite Phoenix Materials and BNK Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phoenix Materials 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.| Phoenix Materials vs. Dongsin Engineering Construction | Phoenix Materials vs. Doosan Fuel Cell | Phoenix Materials vs. Daishin Balance 1 | Phoenix Materials vs. Total Soft Bank |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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